Well we had a sharp drop on SPX yesterday, and we reached the bottom of the
rising channel on SPX, though in the process it evolved slightly into a
broadening ascending wedge:
There is a possible IHS forming, but it would have been a lot stronger
if it had broken key resistance in the 1113 area and gone through to
hit the blue dotted trendline on the SPX daily. Personally I don't particularly rate sloping IHS patterns in any case:
EURUSD dropped to good support on the bottom trendline of the gently declining channel of recent days:
I think that we could well fall from here, and if we break Tuesday's LOD then I will be switching to a much more bearish view, but in the short term we could well bounce here. We hit channel support on SPX and EURUSD and bounced, and we didn't hit the blue dotted trendline on the SPX daily that was the obvious target for the upswing. We may now return to hit it.
The SPX just doesn't look quite cooked to my eye. We missed that trendline, I'm watching some developing patterns, like the H&S patterns on KO and AAPL, that don't look finished on a time basis, we've seen a disconnect between SPX and EURUSD in recent days, we all know wave 2's can retrace much further than 61.8%, and there is a significant turn date coming next week. We may not be quite there yet.
I may just be too cautious nowadays, impatient bears have had a difficult time recently and too many have crashed and burned as they shorted a market that wasn't ready to fall yet.
One of my favorite films is the Assassination Bureau with Oliver Reed. There's an increasingly morose russian character in it that raises a glass regularly during the film, as many of the other characters meet untimely ends, and toasts his 'absent friends'. That is what it has felt like sometimes being a bear blogger since the bottom almost a year ago.
Better to risk being late than be early to this particular party I suspect.
