Monday, September 6, 2010


I have done studies with August and September data to see if September really is as bad as people say.  My conclusion is yes it is.  On the basis of close to next months low September has the highest number of occurrences followed by October in the top spot.  Comparing close to next months close the declines are 34 times and average 4.94% and advances are 24 times and average 3.8%. On August close to September low basis only 3 times in 60 years we have not had a low that is lower than August closing.  Comparing August closing to September low the average is 5.3% and August low to September high is 3.3%.  So far we have done a 5% rally from 1049 August closing spx has not made a low that is lower than 1049.  IMO odds increase every day that the rally in spx will end soon and we will come down to take out 1049.  I am bearish on that account.
The 38.2% rally point is at 648 for Russell's decline from 746 to 588.  Looking at the weekly CHART $RUT is at the top of the channel line which has proved to be a resistance previously.  There is no upward channel that can be drawn in $rut weekly.  
Looking at TNA It is at the top line of the downward trending channel in red and also at the top line of of the upward trending channel in blue.  I tend to believe these will hold and as such we have topped out or within parallax error of topping out.
The SPX weekly and daily are singing the same story.  On the weekly spx is on the top line of the down trend channel. On the daily it is hitting against the line parallel to hi low line in red and also against the resistance black line line from
1220 to 1129.  Finally on the third chart the 50% point for the decline from 1220 tp 1010 is at 1115.  It is also extremely close to Gann 1x4 declining line.  This will prove to be a strong resistance.  Summing up  we are in September a declining
month Both russell and SPX are pointing to a topping action in their respective charts.  New moon is coming up generally is not good sign for socks.  SPX closed at 1004 which is 4 points above the round number that is also bearish.  I am very bearish and am speculating Tuesday could be an DKOD with a strong open that fades away.   I will be using DMRM to set the signals and trades.

1 comment: