SP 2012-10-12 II

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:

  1. 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)
  2. 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.

mkt-profile.png

FIGURE 1 E-mini Combined Profile, Day Session

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