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Keene Little : 9/17/2007 1:18:37 AM

Adding another possibility with all this corrective up and down stuff we've seen since the August low, and as shown on this DOW daily chart, is that we could get another thrust lower to finish a sideways consolidation that will then be followed by the C-wave of an A-B-C upward correction off the August low: Link

The bottom line is that we'll have to wait for the current trading range to break to give us some more clues. In the meantime be sure to take quick profits before this market reverses again and takes them all away from you.

Keene Little : 9/16/2007 11:48:23 PM

Friday's rally looked very choppy and gives me the impression it was a corrective climb that will fail. Because of the corrective wave structure since the August 16th low it's not clear whether we'll start a big leg down (maybe a bounce into or after the FOMC announcement on Tuesday) or just a pullback before we get another leg higher in a larger upward correction (pink wave count). For either of those scenarios though the selling must start immediately on Monday. Link

Any rally back above Thursday's high would say we've at least got a larger upward correction in progress. If on the other hand we get a push above Thursday's high then we could see a rally into FOMC that would likely be bearish but I'll have to see what the pattern looks like as we approach it. It takes a break below 1460 to confirm the more bearish pattern.

The other indices have similar setups. With the techs and small caps lagging the large caps (giving us bearish intermarket divergence) and the lack of market breadth I'm feeling more bearish about these than the DOW and SPX. Link

Ever since the August low for the RUT price has been a chopy whippy mess. It's a correcive pattern which tells us to expect lower. As with the others though, we could get another leg up as part of a larger upward correction. It takes a break below 772 to confirm the more bearish pattern. Link

OI Technical Staff : 9/16/2007 9:59:59 PM

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