Tuesday, September 29, 2009
Flat Completed, Now Heavy Selling; September 29, 2009
The market rallied hard and strong yesterday, and the "bottoming structure" I pointed out in two posts ago proved correct. However, it's easy to label the entire move down from last week as a 5 wave decline and the rally being a flat correction (see above wave count). It should concern the bulls that yesterday's move was done on very light volume as it was a Jewish holiday. Light volume rallies have been the routine as of the past several months and does not suggest a new bull market is underway. Today's consumer confidence number came well under expections which were to be above Augusts, and in fact September's number was not only well below the forecasts, it was lower than August's as well. So it was a very bad report and the market sold off sharply becuase of it. If the wave count above is correct, it means a wave 1 and 2 has unfolded and a wave 3 at some degree should be underway right now. If correct, today should be a big heavy down day. If not, then I'll have to review the count and perhaps open the door for a bullish move to a slight new high above 1078.
1078 in the S&P cash is crucial to the short term bullish case. As long as the market trades below that number, I remain aggressively short term bearish.