S&P Futures: Week In Review for August 27, 2010

Another week has come and gone and the only thing that the bears can say is that the market lost (6.25) for the week. The last time I made a post, I offered two scenarios for Friday. The upward wave (ii) purple scenario played out after extending the b wave down, re-testing 1037.25 in a flat correction. The pattern is close to terminating. Key resistance levels cited between 1061.75- 1071.50 and the gap at 1065.5 remain. The game plan remains the same, i.e. looking for sell signals at these levels. A break of 1037.25 would have at a minimum a bearish downside potential to 1002.75.

Interestingly, yearly cycle work dating back to the 1987 low confirms the general direction of the market and wave count.  Several yearly cycles anticipate a low by 10/29/2010. The 9-month shorter term 1/2 cycle of the 18-month cycle crested at the top of wave 2 circle purple (1216.75) and is now working down. A bottom of the cycle is anticipated by 1/31/2011. Only the 18-month cycle argues that the market may hold up a bit longer before resuming the decline to much lower levels. A crest of this cycle is anticipated as of 1/31/2011 and pushes out the cycle lows to 10/31/2011.

Best of Trading