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Friday, June 21, 2013

Friday Weekly Charts

I suspected we would get a bounce off S1 support, and it appears we are going to get just that. Volume was quite high today, and might lead to suspect that today was a key reversal, but it was options expiration, so pour a little cold water on that idea. We are likely to get a bounce here, probably to the 50dma, possibly as high as pivot point P, but I don; think this market is through correcting yet.  

The weekly chart shows up pretty firmly in a correction, and there is nothing to suggest it has run it's course, so any bounce here should be relatively short. Notice the two corrections we had in 2012: they were pretty mild but still lasted about twice as long as this one has so far, suggesting that we have at least another month of this. 
 The Nasdaq nearly bounced off it's R1 annual pivot point, which could suggest a pause in the carnage here. This pivot point did provide resistance on the way up (although it eventually gave way), so it is likely it will provide some support on the way down, at least for a while.

 The Dow Industrials have come right back down to the annual R2 pivot point. I have no way of knowing what is likely to happen next, because I have never seen this before, so we have ourselves an educational opportunity here.

The Transports are in the same position. I would guess that they would do whatever the industrials do, but that really has not been the case for the last 3 years, so I would not be betting on it.

The Russell 2000, which had broken through the annual R2 pivot in May, is now getting resistance there. Ultimately this is probably going to be visiting the 40 week average, which is getting close to the R1 pivot: the confluence of those two might lead to pretty strong support.

We are now in the correction that never came back in late February when all my signals said one was coming. Whether it's late arrival is a sign that it will be severe or not is unknown, but I think I can reliably say one thing: it ain't over yet.

I will have the new highs update shortly

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