Symmetrical Swings unfolding here in the Dow Futures (YM). This is a classical topping formation. Today the dow barley clipped the 9/19 highs then reversed, this is bearish action. If we can get a close less than the rising black uptrend line tomorrow, this also is bearish action, leaving the doors open for the bears to defend the 10/30 range as firm resistance. If this occurs, further erosion will take place and will target the 10/9 range and then its lows of 14648. The symmetry in the swings suggest this is a decent place to make bets that a further push lower is imminent. I took a short position today into the FOMC minutes at 15623 and am holding this position into a swing trade targeting the 10/9 range. Dependent on the violence of the move and the confluence of selling pressure volume, I'm anticipating the 14648 range to be tested and ultimately broken. With this type of balance that has formed a move & a move < 14648 should endure more selling pressure as this level is the current key reference area. On the weekly time frame I have a bar that's painted pink on the monthly time frame. This is the 1st occurrence of a pink bar since the 2007 highs, I.E. meltdown. A move out of this area confirms that a initiative move is underway, and that selling pressure should intensify. As we can see the upswings are running out of momentum as new buyers are not present holding a bid to the market, thus creating smaller new highs as seen in swings 2,3 & now 4. There's also a clear divergence unfolding in the Dow Jones Transport which is adding to the conviction that one of these indexes is out of sync with the other. For the Dow Jones a October close < 15523 and push & a move < 14394 confirms the pink bar that the market is attempting to put in a high.
|
