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Keene Little : 8/26/2007 10:27:10 PM

Monday's pivot tables: Link and Link

The DOW, SPX and NDX have the same patterns for their bounce off the low on August 16th and they each look like they're finishing an A-B-C bounce with an ascending wedge (ending diagonal) for wave-C. This bearish interpretation calls for a decline either right out of the gate on Monday or after a small pop higher to give some over-throws above the wedge patterns. 60-min charts:
DOW: Link
SPX: Link
NDX: Link

The next two daily charts show the larger picture of where a decline could take us. If we start a deeper pullback this week then it becomes a question whether we'll start the next big decline or just a pullback to be followed by another leg up as part of a larger upward correction--shown with the dark red count on the DOW and SPX daily charts. First the DOW daily chart: Link

The SPX daily chart includes a Fib time projection based on the decline to show how a larger A-B-C bounce off the August 16th low might look (in dark red) if it took a little more time than the July-Aug decline (which would be typical for the kind of correction I'm depicting). The alternative says the upward correction is over and we'll now get a decline that starts to accelerate lower (shown in pink). Link

The RUT has been in a slightly different pattern and it counts best as having completed its A-B-C correction of the July-Aug decline at Thursday's high, 8/23. Friday's rally stopped dead at the downtrend line from July 19th so the bearish count is set up for a decline from here and it will need to start right away on Monday or else new highs for the bounce are likely coming. RUT 60-min chart: Link

OI Technical Staff : 8/26/2007 9:59:59 PM

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