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LT wave for October

Posted by Dan on October 3, 2017

Markets have crept to new record highs. But is it a convincing breakout? The S&P 500 stays within its narrowing range so I would still keep my powder dry here. One or two down days could easily wipe out a full month’s gains, that’s how slow the recent advance has been. Let’s have a look at the Nasdaq chart:

^COMP (Daily) 12_30_2015 - 10_2_2017

The Nasdaq has climbed and closed above 6500 for the first time. But it has taken more than two months to get 1% above its late July highs. My indicators are unimpressed with this move. The Earl (blue line) and MoM are near the zero line and nowhere near the highs they reached in recent months, which is a clear bearish divergence. And the Earl2 (orange line) is flatlining just above the zero line, completely negating last week’s push to new record highs.

While this doesn’t rule out a further climb it is not the kind of setup that prompts me to buy or stay heavily long. Sometimes you just have to watch and wait and this is one of those times imo.

Our LT wave did a mixed job in September. Here is he wave for October:


Expected weakness until Sep 9 panned out nicely and was followed by a stronger period with a market peak around the 21st as projected by LT wave. But subsequent weakness did not materialize and stocks climbed to new highs in the final week.
For October the wave suggests weakness until the 13th and then a stronger week with a peak value near the 19th. The final week shows a drop again with an expected low near the 27th.

2 Responses to “LT wave for October”

  1. willczur1 said

    As long as any FED BOJ ECB does not finish printing cash at gigantic amounts LT Wave loses credibility

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