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Marc Eckelberry : 9/18/2006 12:40:12 AM

Oil and especially gold keep the bounce going from Friday. More and more articles in the press that the oil and gold run is over, a complete 100% reversal from only 1 month ago. Tomi Kilgore, my favorite contrarian indicator who has been wrong at every major turning point (including being bullish on oil at 75 in August) is now calling the end of the oil bull run. This is the kind of stuff I thrive on and if the action on Friday is confirmed, I think they called the end right at the bottom. Never fails. Let's see if 577 and 62 hold. Myabe one little push down there and it will be time to load up. If the Feds don't raise but there is a hint of inflation left, gold will be bought as a hedge. If Chavez sticks with Iran, some fears could grow again. Since most selllers are pretty much exhausted, the path of least resistance is up.

Keene Little : 9/17/2006 11:03:17 PM

This is an update to the SPX chart I posted a couple of times last week. I like this chart because it shows a great setup for SPX and it will be worth watching this one. Once we get an idea from SPX which way the market is headed we should see the same thing across most sectors. This is a bearish chart and the only question in my mind is whether or not we've seen the high. Link

The move up from the July low is wave-C of a 3-wave A-B-C bounce from the June low. There are two things here that make me think we've seen the high. One, wave-C achieved 162% of wave-A, which was the 1st leg up from the June low, at 1323.28. Two, price did a little over-throw of the top of the wedge and fell back under it on Friday. That's usually a good sell signal and I think it's worth playing the market from the short side from here.

But I've depicted price action showing a pullback and then a final run higher that could take out the May high. If it takes a while for this down-up sequence to play out then the ultimate high could be closer to a Gann target of 1345. The reason for this depiction is because of the impulsive looking leg up from Sept 11th (looks like a 5-wave move when viewed closer up). This pattern can't end with an impulsive move unless it's the c-wave of the 5th wave, and that's what I've drawn in. But the leg up from Sept 11th could be a more complex corrective wave in which case the high was put in on Friday.

So the bottom line for me is I'm expecting either a pullback or the start of the next big leg down. After the pullback starts I'll watch for evidence that it's going to lead to another push higher (if it's a choppy sloppy pullback) or will lead to a break down (with an impulsive decline). We're very close to a very good short play if it's not upon us right now. Get short for now and then we'll see what comes next.

Keene Little : 9/17/2006 10:45:07 PM

Monday's pivot tables: Link and Link

OI Technical Staff : 9/17/2006 9:59:59 PM

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