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Keene Little : 1/7/2008 12:06:46 AM

Monday's pivot tables: Link and Link

I had mentioned near the close on Friday that the DOW and SPX were down to the levels where they needed to bounce, or else. The DOW has dropped down to the uptrend line from August which could be the bottom of a sideways triangle consolidation (green wave count). If it does rally back up then we'll get to see if it's going to be a big rally or just up to the top of its triangle pattern. The bearish wave count calls for a continuation lower and a break below 12724 would be a bearish signal. Link

SPX has essentially the same setup. It dropped below the bottom of its uptrend line from March 2003 and tagged its Fib projection at 1410.93 for two equal legs down from the December high. So it needs to bounce right away or else it will quickly break its November low and be bearish. A drop below the August low would negate any further bullish possibilities. Link

The COMP and RUT are sending some very bearish signals here and now and it has me seriously wondering what kind of bounce we can expect in the DOW and SPX. I've removed the bullish wave counts on the COMP and RUT charts because frankly I don't see any. The wave pattern is bearish. It takes a rally back above the December highs to negate the bearish wave count but I don't expect that to happen now. I'll be looking at any and all bounces as shorting opportunities for now.
COMP: Link
RUT: Link

OI Technical Staff : 1/6/2008 9:59:59 PM

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