11/9/11

Hope you weren't long.  I'm still underwater, but nowhere near as much.  I do not wish to divulge exactly how much skin I have in the game, but let's just say that as of yesterday's close I was down 41 currency units, whereas today I am only down about 16.

Yesterday I suggested by my chart that the market might have finished [5] of "c" of (ii) up.  Today's action seems to corroborate that.  Like its cousins at larger degree, Subminuette i of (iii)'s goal is to pass or at least approach the Minuette (i) low, which is 1215.42.  I'd say it has already succeeded in this, having made it to 1226.64, a level which most notably is below the .786 retracement of the 1215.42-1277.55 move.

Now, there is obviously a rather large gap.  However, if this bear market is really as significant as we are expecting, there should be gaps.  According to Peter Brandt, there was a gap down on the DJIA on June 9, 1930 during the Great Depression that went unfilled until 1951.  And of course, from that same source, there are numerous gaps which have been left unfilled since, the most recent of which is DJIA 8361 (7/15/09; this is also an unfilled gap on the SPX and fills at ~907).

The point of this is not to suggest these gaps down we've made since the top at 1292 won't fill; the point is to suggest they don't have to fill.  And even if they do, there is also an unfilled gap at 1155 that probably should fill too.  Also, there probably weren't many futures traders in 1930.

On the other hand, the dollar index is touching its upper daily Bollinger band and is pretty close to the .618 retracement of its down move.  On the other other hand, it did bounce off its 55-day EMA and is extremely close to a golden cross of the 55-day and 233-day EMAs...