Wednesday, September 30, 2009

Decline Looking Good; September 30, 2009

Last day of the quarter and the market sold off sharply while staying under my key bearish level of 1078. This decline is well in line with what the wave count called for, which was a wave 3 at some degree. The bullish non-confirmation between the Dow and S&P I spoke of yesterday was immediately erased this morning, however the big decline created another bullish non-confirmation. See above the cash Dow and S&P 15 minute charts. Notice that the Dow made a new low from last week but the S&P (and Nasdaqs) have not. This non-confirmation needs to be erased soon in order to keep the decline on strong footing.

The S&P cash needs to break below 1041 to confirm the Dow's decline, otherwise it opens the door to a sharp snap back rally, or a rally to new yearly highs. I'm still aggressively bearish as long as the S&P cash stays below 1078 but I want it to break 1041 soon.

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