1 Markets dropped already last week and triggered the next leg down – though I am not sure about the count yet but The DOW count looks like we are in B correction down of an ABC upside correction after the 1-5 count down. More on that later today or tomorrow. In any case we will drop further from current levels – one crucial aspect is todays gap down as later this week early next the bias will be positive for a few days and those gaps also are crucial supports or rather now resistance levels which will be tested.
Overall sentiment has drifted a bit more towards neutral except for options which are as bearish as it gets and rather hint from a contrarian point of view to the fact that the downside might be limited for now ( short term).
Astro pattern clearly show that early Dec ( 1-2 week the current negative Euro momentum will reach a climax). Therefor more selling pressure is a given but the situation is anticipated and the fact that a Japanese fund is dropping BTPs rather hints to the fact that a low for BTPs is close as they usually are not the early birds to a trading cycle rather the late comers. Problem is obviously as we are approaching year-end that no one wants to sit on weak assets which will rather create opportunities on the long side.
Some technical patterns show clearly that a decisive low around the year-end will present it self as the weakest sector the financials enter a count monthly 9 in DEC and one icon Goldman may make its low in 2 weeks from here in the 80-85 area, that is one to follow closely but almost all banks have a 9 month count next month as bond charts have a 9 count to the upside indicating a top within 4-5 weeks.