Friday, September 12, 2008
Sept. 12, 2008; Markets on Hold 'til Monday
Last night news came out that Lehman Bros. is trying to get itself sold to another bank and it's rumored that the government will once again use taxpayers' hard earned dollars to bail out billionaires like they did with Bear Stearns, Fannie Mae, and Freddie Mac. The decision is likely to come Sunday which sets Monday up for a wild day in the markets. So today, people are just speculating on what will transpire over the weekend and are positioning themselves for that news on Sunday. So I don't expect much of anything from the markets today.
What I do notice today is that after today's choppy upward action, it illustrates that this rally is clearly corrective. The structure of the rally looks like it's weakening and its final stages that will give way at any moment, or will have on more quick "pop-rally" before rolling over to new lows. On the updated 15min S&P chart above, it shows a WXY combination correction. As you can see, the upward movement is very choppy with overlapping waves. It is not impulsive, so it is against the larger trend. This is a sign that the market is struggling very hard to make gains. Again, this tells us the rally is a countertrend move. Eventually, it will give way to the next leg lower. But it probably won't happen until next week.
I continue to patiently wait...