Hello from the Windy City. I knew for months I was coming here this weekend and for a long time it looked this would be World Series weekend here. I was looking forward to a Chicago World Series vibe. It didn’t happen so I made my own and the room was filled for my all day seminar. I was truly humbled by everyone’s presence.
I come to you at one of the most important times in stock market history. Last week the tech indexes made fresh lows and were not confirmed by the Dow or SPX. Let’s take this one step at a time. As you know the important time window started last Tuesday and for all purposes wraps up on Monday. In case you missed recent posts we are in the 262 trading day/377 calendar day window off the October 2007 Dow top. The October 10th low came in on day 238 off the NASDAQ high at the end of October 2007. We’ve had good timing precision up to this point. As you know I’ve been looking for a retest of the lows with the higher probability break by one of the tech indices. Why was I looking for that? Simply put, the SOX has been leading to the downside. The SOX has been in a downward pattern and the tech sector can’t turn up until the SOX is done going down.
One of the points I’ve made over the past couple of years concerning the SOX was it may not have been leading to the upside anymore but you’ll see what happens on the day of reckoning. That time has arrived and those individuals who paid no attention to the SOX on the way up may have renewed respect. So we got our retest of the lows.
Friday was one of the most interesting stock market days I’ve ever experienced. As you know by now Friday was our zero day as far as the cycles are concerned. That was the day we woke to find out Futures markets were limit down. The media thought we could open up down in a huge way. Something funny happened on the way to Armageddon. The thousand point down day in the Dow never materialized. The NDX broke lower but actually closed above the low of the 17th. All of a sudden, selling pressure abated.
This has the potential to be the big turning point. Those of you who’ve followed my work know I always tell you not to front run the bars. But if we do get a big up day on Monday, conditions are extremely ripe for a turn and if it does happen you should go with it. I had the chance to meet Dick Arms this weekend and his indicators are at their most oversold point in recent memory. I let you draw your own conclusions to that but I’m the timing guy and our model suggests we are at the fork in the road. Additionally, this week is the Fed meeting and it always seems they appear at important turn windows. The higher probability is a turn at this point but I offer one caveat. These charts don’t have to respect the turn windows. I’ll tell you this much, if we violate this outstanding time window, something much larger than what we’ve experienced up to the point is materializing. You can’t rule that out but from my experience markets will wait until the exact moment you give up on what you think they were going to do. When your emotions have been stretched to the maximum level and your patience has been tested to the breaking point, that’s when the turn materializes. Friday was our hint that we have a really good shot right here. What we need to do is sit back and let it happen. This is the end of October and our time window is up. If it is going to turn, now is the time for it.
If you were ever thinking of subscribing to one of my newsletters or signing up for the coaching program, today is the day. I have a special $262 on the coaching program in honor of the turn window and the show. We also have good discounts on the newsletters. But they all expire at midnight PST. Go to www.Lucaswaveinternational.com.
