BarroMetrics Views: SP 2012-10-12 II
Sorry folks that was a long ‘tomorrow’ – from Oct 12 to Oct 29.
A lot on my plate and the blog is the on my ‘great to do, want to do. but not essential to do list’. Hopefully things have settled down.
The S&P has bottomed out, rallied and appears ready for another decline. The principles I wanted to illustrate are still valid and can be used to monitor the current outlook.
Figure 1 shows the same down move as the October 12 blog; except this time, we see combined profiles. Combined Profiles come as Bear Profiles (‘b’s), Bull Profiles (‘p’s) or Sideways Profiles (bell curve). Here I”ll mention two key Profile principles:
- In a Bull Profile, acceptance below 50% of the initial directional move (I call Initial Price Movement), marks the end of the Bull Profile and the start of either a Sideways or Bear Profile. (reverse for Bear)
- As a rule, a market goes from Bull to Sideways to Bear (and vice-versa).
In Figure 1, we saw the start of the bear run when we see:
- at point 3, acceptance below the 50%.
- from Pint 4 to Point 7, we see a SW profile developing and
- at Point 8. we see the start of new Bull Profile.
Tomorrow, I’ll look at the current action.
FIGURE 1 E-mini Combined Profile, Day Session