9/28/11

The market's action recently can be interpreted in innumerable ways, but as my previous count has yet to be invalidated or even yet rendered unlikely, I will stick with it.

Despite the fact that this count is more bearish than Yogi, I closed out shorts today.  Why?  For one thing, because I entered them at a bad position (basically, Monday at the close) and wanted to leave at least with a profit (which I did - about 1%), and for another thing, this graph could be interpreted as a bullish cup and handle, plus all the gaps have been filled.

However, the 30-minute and 60-minute charts still have no lower low (than 1114) on higher RSI; furthermore, the deep retracement is more conducive with a second wave than a fourth wave (and if it is a fourth wave, where was the second wave?)  Yes, it doesn't "look" like a third wave, but not all third waves look like the prototypical third wave.

More to the point, we are supposed to be having end-of-quarter window dressing right now.  If this - down 45 SPX points since 2 p.m. yesterday - is what passes for end-of-quarter window dressing....

Also, just as an interesting aside, I noticed that what I have labeled as Micro [1] touched the 5-minute 233-EMA from the top, and Micro [4] touched it from the bottom.  Moreover, the averages are turning short-term bearish again.