Earlier I suggested that the SPX would probably stay glued to the top at least throughout the morning. The fact is, it lasted all day. The head fake usually stops at or very near the Cycle Top. In this case, it turned 5 waves into 9 waves through the extension of the rally.

Tomorrow is day 262 in a very mature Master Cycle and a Cycle Pivot day, to boot. The last time this happened was in July 21, 2011, when the indexes peaked, then proceeded to decline impulsively for 19 calendar days (12.9 market days). A similar decline starting tomorrow would go to December 3.

The 2010 Flash Crash lasted 13 calendar days from top to bottom. That encompassed two weekends, so the actual market days were 8.6, with only 2 days beneath the 50-day moving average. A decline such as this would extend to November 27 (the day before Thanksgiving!).

Either date for a low would be ironic, since the week of Thanksgiving is supposed to be the most positive week of the fall season for equities. Traders in-the-know are expecting a very chaotic market when it all cuts loose. I wonder wat this portends for Black Friday???

VIX finally appears to have made its Minute Wave [v] low. This is most likely the end of the head fake move at “the squeeze” in the Trading Bands. The VIX appears coiled to spring up dramatically from its low.

Could it happen tomorrow?

TNX is ready to spring up from its trendline and the 50-day moving average to begin a Minor Wave [3] at or near 30.55. This certainly would be a jolt to the markets, since the prior high in TNX was 29.84 on September 4.

Note the truncation of Minor Wave C at the bottom of the chart. TNX is in such a hurry to go higher that it isn’t finishing its retracements.

Regards,

Tony

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