TLT: Bounce or New Bull Campaign:TLT is in the midst of its expected bounce off the 200 day moving average. For a synopsis on the TLT see the August 15th post. The question now becomes is this a new leg of the aged bull market or a bounce before the 200 day moving average is challenged once again and possibly violated to the downside.
- bounced off the 200 day ma coincident with the .618 fan line
- the bounce has been 50% of the recent decline
- The large square (AC) is based upon the March-July rally. The 1/2 square of that rally is represented by square BCDE
- The square of the recent decline is represented by CXZY
- The center of BCDE square--where BD intersects CE-- marks the August price low at X. Note how this level is also the same as point D since the larger square is almost a perfect 45* isosceles triangle.
- The center of square CXZY--which is formed by the recent decline--is at approx. 128 which is close to the horizontal 61.8% retracement of the recent decline. This intersection occurs (in time) around the important Sept 12-16th time frame.
- Another important intersection of time-price occurs in the later part of September where point D and point Y are situated.
- 120 and 128 are the hot spots to watch on the TLT and September 12-16th and September 24-28th are the 'energy dates'.
S&P 500Not much to say here. For my thoughts on the S&P please refer to the August 21st post.
1390 remains the magic spot for the S&P (close only) and September 12-16 looks like it will be bringing some energy to the markets. The Transports are hanging on at the up trend line--a decisive break of 5000 will spell trouble for the other equity indexes. (Dow Theory) (see August 29th update for Transports)