In honor of the end of the month and because we are at such a crossroads in the market, I have put up some longer term charts. Long term count is 14 across the 151.16 line at about .40 per box multiplied by the number of boxes in a reversal (14x.4x3=16.8+or-) which gives a target of about 134. Which is where we have stopped. We have had shortening of the thrust going down and even rallied past a previous column of x's. The trend is neutral short term but our old counts are still possible.
On the short term chart you can see the small area of support that is developing.
Our glum British pound is continuing to stair step down. We have no action to hint at a bottom other than how far it has fallen without a rally.
The 3x chart only emphasizes the weakness. Look at the determined selling that began in November. No rally of 3 boxes recently.
The Bond has been in a trading range for almost 10 months. Whichever way it goes with volume it will go along way. On the bearish side is that we have stayed in the lower half of the trading range for the past two months, indicating there is still plenty of supply.
Yields have been in a trading range since last May as well and they have swung to a hinge at 46. I wish I knew. Someone who knows said every human being should be short Bonds.
This is another view of the same trading range. Notice the upthrust and hinge near the top.
The same trading range.
We have already described the distribution going back to September, the question is: is the area beginning about 1/27 re-accumulation for another rally. It could be.
The institutional index makes the same point as it is the index of the stocks most widely held by institutions. The conservative count of 8 across the 499.4 line has been accomplished. If we continue up here there are many valid bullish counts that would bring us to new highs.
The same is true of the SPX.So where do we stand? The bonds give little support to either direction but hanging in the bottom half of the range would be bearish bonds and bullish stocks. The Euro which tends to trend with the stock market recently might be ready for a bounce in which case stocks would rally. And finally since much of the markets weekly gains have been between Friday noon and Monday noon if they are going up they should do it tonight. Are you waking up at 3:00am?
