S&P 500 - October 21, 2012

Index is at an interesting juncture



You remember that I had a weekly TopFinder curve that had gone 80+%, which theoretically indicated a potential for an uptrend being spent up (If you are not familiar with MIDAS and TopFinder curves and interested in finding out what they are, google them)


We had also expected some sort of sputtering late September based on a  theoretical/statistical intermediate as well as shorting cycle low projection


Theory and statistics have so far worked OK as market indeed ran out of some steam

This is the updated weekly charts with MIDAS curves

Index is resting on nearby support curve around 1430 -- it basically left things in limbo by Friday's close


Breaking below 1420-1430 area increase the risk of getting an intermediate trend reversal


Looking at daily frame

Nearby support is around 1415-1420. There is a chance for a contracting consolidation between the two red lines. Forming that consolidation would be good. Ignoring it and breaking 1415-1420 will not be good and increase the probability of an intermediate trend reversal

Recently I said: "Meanwhile, I would love a massive down, washout day to get all sorts of perma creatures crying end-of-the world. good long entries are usually given by those, if not for months of an uptrend, at least for a juicy squeeze party of shorts"




We got the juicy bounce for a trade but I don't think we got mass perma-bearishness which are typically associated with longer-term lows


The recent low could qualify as a short-term cycle low. It came a bit early for an intermediate cycle low, If it is violated, then the chase will be on to find an intermediate cycle low, which is, theoretically due in the Oct 22- Dec 3 time frame

Investing in the financial markets can involve considerable risk. Past performance is not necessarily an indication of future performance. All information included in Market Time Premium reflects ongoing thoughts of Market Time authors about market-related issues, and is prepared for educational purposes, and is presented as authors’ observations, and is not a solicitation, or an offer to buy or sell any security or use any particular system. Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. Market Time Premium, its author(s), and its affiliates do not represent themselves as acting in the position of an investment adviser or investment manager. Market Time Premium, its author(s), and its affiliates shall not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. From time to time, Market Time Premium, its author(s), and its affiliates may hold positions in securities mentioned, but are under no obligation to either divulge or hold such positions.