So perhaps the chart of the week is Apple computer. It is coming down to major support. Given its 12% of technology, if it elects to hold the line from 360-65 that could be a major shot in the arm for the entire market. That red line is also the 200-day moving average. If it’s true that program trading rules these markets and it was a recurring theme from several speakers then the programs are dialed in right now. I don’t doubt that at all but I would imagine the people that program those computers are looking at key support and the computers also like the 200. There’s a chance we could get Apple leadership back if it were to hold. Don’t hold your breath but one of the key bits of information I’ll be watching in this holiday shortened week is what Apple will be doing when it gets to support. It’s going to tell us a lot about the rest of the market.
Finally we have China which got hit hard and is already halfway back to the low. The problem with the SSE is it had a decent Gann reading and a Fibonacci relationship at the recent high. Mr. Fibonacci and Mr. Gann were more or less in agreement. So who am I to argue with those guys? Luckily the readings at the bottom are pretty good so I’m not looking beyond a retest of the bottom.
But what does it tell us? Technically, the stock market has more room to drop, probably more than some moderately minded people realize. But on the other hand sentiment is starting to get really thick. There is a couple of mitigating factors. We are on the back end of some long term cycles which have the potential to turn the market this week. Monday is the 3rd anniversary of our important Nov. 21, 2008 NDX bottom which close followers of our work know to be a 21-year cycle completion point to the top of the 87 market in the Dow. By itself I wouldn’t expect a turn but if we take all of the factors there is the potential for the bearishness to intensify and climax this week. But it’s come very far very fast to even be in this position. We could get close to the October lows just as quickly. But it’s a good news bad news type of event. We could get the wits scared out of us by another one of these shakes of the tree where all the coconuts fall out but at the end of the day the courageous few left standing may find a buying opportunity. By the time we come back from Thanksgiving we will be in the holiday season. But we still have to cross part of the canyon to get there.
Am I saying this is a buying opportunity? Not now but one may materialize from lower levels. If there is a silver lining here there is no complacency and complacency is the fuel to keep a bear going.
Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years. Lucas Wave International (https://www.lucaswaveinternational.com) provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.