A Tiny Taste of Things to Come ~ The Risk Averse Alert

Thursday, September 22, 2011

A Tiny Taste of Things to Come

And a "strong move lower" it was...

SPX 5-min

Supposing that, five waves down from Tuesday's peak are unfolding, typical relative strength improvement, fourth wave versus second, began taking shape late this afternoon. So, a further move lower completing these five waves down should be upcoming.

Whether five waves down from Tuesday's peak will complete the bout of mid-stream weakness discussed yesterday is uncertain. Much depends on whether wave (2) of C still is forming, or wave (3) of C has begun. With the market on track for its worst week since October 2008, I am rather siding with the latter possibility.

Not that this distinction matters much. Once the market bounces following its present decline, it probably will be Katy bar the doors time.

Fast Money
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