9/21/11

Autumn (in the Northern Hemisphere) doesn't technically start until Friday, at which point we will reach the equinox and nighttime will become longer than daytime for six months*, but the market definitely decided it would make like the leaves on autumn trees today, and fall.

Notice that the immediate reaction to the long-awaited Fed announcement today was (1) to fall, and (2) to not fall as much as either later in the day, or yesterday into this morning (i.e. it's Micro [1] of iii on this chart).  At any rate, the reaction to the announcement was far more Prechterian than conventional.  Stocks fell.  The dollar rose to levels not seen since February.  Oil fell.  Gold fell.  Silver fell.  Even AAPL managed to fall.

At the beginning of an impulse wave, particularly one which for all intents and purposes has no downside invalidation, determining wave degree can be difficult.  (This is in part what screwed up Prechter in Cycle V up - the market could have theoretically gone up as far as it darn well wanted to.)  However, I believe Minute [i] of 3 will end at approximately ~1010-1040, about the same place a Minute [v] of 1 would probably end.  Why?  Because this would fool people, and it is the bottom of Intermediate (B) of P[donut].

We breached 1174, triggering my bear entry. There is still technically a potential bullish case for this as (iv) of [c] of 2 until 1160.67 is breached, but... yeah.  We actually hit the cash-equivalent of that level in the futures after hours, and 10-minute RSI doesn't look too bull-friendly.  Furthermore, we're already more than a .618 retracement (on linear or logarithmic scales!) from 1220 to 1136.

*...okay, because of atmospheric refraction and the fact that the sun is a disk rather than a point, it's actually a few days later than that, but... meh.