DOW defended first attack – SOX confirms a temp low in tomorrow

The Dow is holding up so far, after testing the 9800 support by making a 9525 low – sounds strange but exaggeration is a regular capitulation pattern. This is basically a possibility but for a capitulation the volume was too low yet.
Anyway, it’s always good to have single stocks or sectors confirming a low, even if it’s a temporary one. On the left hand, we have the SOX (Semiconductor Index), which so far made a TD combo 12 and needs to make a 13 tomorrow in order to confirm a possible low. The VIX made a SEQ 11 and we need tomorrow a 12 to prepare a temporary low. XBD (Broker index) made a SEQ daily 12, so again the final 13 tomorrow might do the trick. The DOW made a TD combo 13 today – summing it up, we have a kind of low building up this week. The odds are though not the real low of big wave A, that is still due in 3-4 weeks more likely. One point to watch are todays’ gaps but since pressure on central banks is rising we very likely will get rate cuts by mid this week and have a brief but sharp rally and testing the lows again thereafter as well as making new ones. In wave magnitudes, wave 1 down was 300 in SPX points and a 1.618 factor is 490 down giving a target of 950. Our initial target of 1050 was already exceeded and since we are finishing this leg in a kind of crash mode, we might need even more panic. The weekly SPX has a 9 count this week, which indicates that we need to 3 lower weekly closes going forward. This week should mark a temporary low though and has confirmed the triangle breakout and a channel drop out pattern.

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~ by behindthematrix on October 6, 2008.

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