The eMini futures are approaching the top of the 60 minute channel, which now resides at 989. The modified DMX is weakening, suggesting that it’s going to be a struggle for stocks to move higher, but its probably too early to expect them to turn down now. The second chart here is the SPX 30 minute chart with just the RSI divergence and Cycle-Trap indicators present. This chart does a remarkable job of signals when both of those indicators signal together. Right now the Cycle-Trap has turned down without an RSI divergence, echoing the other charts analysis that we’re weakening but not convincingly so.
Fundamentally the market is worried as to whether all parties will settle their Lehman credit default swap positions that are due early this week, and then Thursday the Washington Mutual CDS settlement prices will be calculated. Of course we are watching this weekend which marks the “dark days” that should be the end of the ‘panic’ sentiment that has been pervasive world wide. I think it all adds up to another decline and test of the lows later this week, but early Monday morning is just too soon to position for that result. Stay tuned.
click chart to enlarge
click chart to enlarge
4 responses so far ↓
1 JC Martin // Oct 20, 2008 at 10:56 am
Hi Chris
in the text the next panic forecasted is in 2023. Is this month’s action not considered a panic? to me it looks like one, but then why couldn’t it be forecasted? are the spiral calendar calculations missing something somewhere?
thanks for clarifying.
JC
2 tipllc // Oct 20, 2008 at 12:46 pm
Hi Chris:
Still trying to figure out where the Nov 10-11 “turn” fits into all of this (from your June writings), any recent updates/thoughts?
3 ramparikh // Oct 20, 2008 at 11:22 pm
Chris,
On the comment you mentioned the “dark days” and this weekend the end?
I thought the Nov. date mentioned in your June report was the end?
Thanks for clarifying.
RAM
4 AC // Oct 21, 2008 at 11:41 am
Nov date was presented as a turn date. Not specifically a high or low. For the date to be effective you need the market to rally hard into it and turn or fall hard into it and turn. If neither happens, then it can be disregarded. So the possibilities are (1) market continues lower for a few more weeks and the low is the big one off say the May highs (2) Market turns up sooner (say oct 26) and it’s a reflex high in the move off lows (3) it’s a dud. With such important tops creating the date it would be a shame/surprise if it was a dud. Let’s see what happens.
I understood dark days as the likely point for a crash low. I guess Friday/Monday is still a long time away in these markets, but perhaps the crash has already happened and the date becomes less relevant. If market continues sideways in this triangle for the rest of the week, then maybe the Nov date will be an important interim low en route 2010 and not Oct 26.
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