Thursday, July 31, 2008

July 31, 2008; Dow Futures Dropping as Planned

Dow futures are falling nicely this morning as I called for yesterday. The new is talking about the jobs and GDP number for the reason, but I, nor other ellioticans, knew what those numbers would be yesterday but we knew the market would fall. Once again proof that news doesn't move the markets, crowd sentiment and psychology makes the news.

I'm looking for a top to be in-in the markets and a massive multi-week selloff to possibly be underway right now! We'll see. The risk is at the highs of yesterday, so the risk/reward is outstanding.

The above chart is the Dow emini futures and it shows the decline that started shortly after I called for it yesterday after I called it and making a slight new high. Also notice the big bearish engulfing candlestick (circled). If that candle closes like that, it should signal that some type of top is in, if not THE top.


Anonymous said...

1291 was tested on the e-mini before the open and held. However, I would not be surprised if the rally continued into next week and possibly tested somewhat higher levels of resistance before the big decline. The structure just looks like it needs one more push up to complete. No guarantees here just opinion. :-) Diver

Todd S said...

Hey Diver, yes it does look like another push up is needed now. It seems that the S&P needs to break 1300 and get into the 1320-1340 area before rolling over. The market has rallied again right at the open and breadth is almost flat. This is not what should occur if a huge wave 3 of (3) decline is underway. There should be virtually no buyers in the market. This is not the case this morning. But that all can change in a heartbeat. If yesterday's highs are decisively broken in both the Dow and S&P, it should swing the door wide open to the 1320-1340.