Monday, September 27, 2010

Monday Update

Things are getting back to normal so regular updates should begin again.
S&P 500
The S&P broke through the Time Price harmonic Sept 21-23 @ 1141 on Friday, but as of Monday afternoon the market has had no carry-through. (It is interesting to note that the December S&P has oscillated around the 1141 level since Friday's opening. Continue to monitor the 1141 area closely: Resistance becomes Support. Levels to watch: 1107 1128 1141 1156 1175
A possible rally to the 1175 area is still possible although the date at which this would create a time-price harmonic is more difficult to ascertain. There may be a time-price resonance if the S&P were to rally to the 1175 area on Wednesday of Thursday.(see Energy Dates on the left)
The market is becoming overbought and the bullish consensus as indicated by put-call ratios, ISEE call-put ratios and market sentiment are suggesting that there are far too many bulls showing up, expecting significantly higher prices. The market has a peculiar way of defying the wishes of the 'crowd'. (see Aug 24-27 S&P @ 1038 as a prime example)
Watch the Transports: This index may give clues as to where the general market is headed--it is still having difficulty establishing new recovery highs.

The precious metal markets are breaking to new highs but are becoming dangerously over-bought--and over believed. There is a Gann Square cluster at the 23.30-23.90 area for silver. Perhaps the market may blow off to that area before correcting. These markets will be monitored closely over the next several days. A move to 23.50 in Silver along with a advance to 1320 on Gold could set up a short term top.

More charts and analysis later this evening.

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