The NDX has broken down out of its rising wedge pattern after making a slight new high this morning. The cycles tell us that we have two solid weeks of decline ahead. At the very minimum, we should see a break of the November 25 low at 2150.88. Chances are good that the decline may go even deeper.

The SPX has also broken its rising wedge and is also due for a decline at least below the November 25 low 1158.67. This is the beginning of wave (c) of wave 3. One of the things that the cycles model is telling us is that this decline may go right through options expiration week, which ends on January 20. The ideal date for the next cycle low is January 24. Considering that my cycles model called for an ideal high on January 3 in the SPX, I won’t argue with what my model is calling for.

We’ll find confirmation of the reversal below the Cycle support/resistance line at 1271, Mid-cycle support is at 1267.86 and the 200-day moving average is at 1258.37.

Good luck and good trading!

Regards,

Tony

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Comments

joe
19 Jan 12, 11:12

now that we have rallied????

Now that we have rallied from 1152 on the S&P on the day after thanksgiving to 1315 or rougly 183 points, u have to wonder whether ur view on the markets is all wrong. Technically everything u observed is true. Granted the volume has been nothing short of horrible but in the end price is everything and we've seen stock prices move up 15 to 20 percent in 7 weeks. In addition the long term chart of nasdaq looks like it wants to break out to new 2 year highs. Given all the bearish news, aren't the markets telling us something may actually be going right?

john
22 Jan 12, 17:30

It would be nice...

..if you could provide some more about what you think is happening here. I think everyone is bewildered. Its not your fault.

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