Stock market crash warning! The present market correction appears to be morphing into something abnormal. My proprietary supply/demand accumulator is on the verge of moving into crash territory. Since I do not want to illustrate this with a lot of numbers, I will use point and figure charts as proxies. Point and figure (P&F) charts have been used since the 1880s. They ignore the time scale, and simply record price changes. Upward movements are recorded by columns of xs, while downward movements are recorded by 0s. The first chart is a model double top/double bottom formation, The one to look at is the double bottom, which in P&F parlance, is bearish. The rightmost column of os breaks below the lowest o in the column to the left. Now, please look at the charts of the narrowest to broadest markets, the Dow Jones Industrials, the Standard and Poors 500, and the New York Stock Exchange. All rightmost columns are declining (os), and one more recorded decline will form the bearish double bottom. And, if the price of the Dow touches 16650, the S&P 1920, and the NY 10400, the double bottom sell formation will become activated, with highly bearish implications. I am also attaching a bar chart with all of my price cylinder additions to give some indication of relevant support and resistance areas. October has often proven to be hazardous to equities, and it seems, to me, that this October may be very dangerous, indeed! My opinion only, not to be taken as either trading or investment advice.
Posted on: Wed, 08 Oct 2014 03:03:51 +0000
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