[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] The BABA High on 9/19 was a Tell as I had suggested. The Decline was typical of a Viral Cascade which usually culminates in a Capitulation. I registered Extreme Sentiment near the Low but that did not, by itself ensure a bottom. But, the presence of Timing factors like the Black Hole and pandemic memes like Ebola were additional tells.
The Talking Heads were dumbfounded because they did not want to know that they did not know what was happening. The cogent profile for a 9/19 High and that a cogent Black Hole Low due near Mid-October was wonderful. Investors are seduced by phantasmal fundamental stories. They believe that Rationality rules. Markets are really influenced by the hidden energy patterns. Markets are ruled by esoteric noumenal indicants rather than phenomenal fundamental tales. A great Capitulation has been registered.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] A Negative Price Magnet (Black Hole) occurred on 10/15 was cogent and markets are rebounding from that cohesive event. It was a classic pattern as I had allowed. What a wonderful trade from 9/19 to 10/15!
Now, there is a dearth of very important near term nodes. Thus, relatively ordinary trading may lawfully occur. There may some sort of relative extreme near 10/24. There are some negative energy nodes due 11/10 and also near 11/18.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture Complacency was completely dispelled. The cascade of Negatives was overwhelming but was discounted, near term, by the Capitulations. The Market Mind is recovering its puerile Optimism.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold has bottomed but does not seem to be going up importantly. Treasuries put in a Spike High but have not reversed meaningfully yet. The Energy area was in a profiled “Capitulation zone” last week and did Reverse. These collective behaviors are additional tells of post Black Hole behavior.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The best Sentiment interpretation continues to be that the 9/19, BABA High was cogent. Exceptional Low sentiment occurred in the vicinity of the Capitulation with a “0%” reading on 10/14.
Markets are now following a classic Post-Capitulation script: Rebounding as the Pundits re-grasp their bullish “Guesses” once again. The break and the bounce were great profiles. More Stock Rebounds.
[/newsletterchapter2][newsletterchapter2 title=”INTERMEDIATE TERM SENTIMENT”] The Intermediate Sentiment, shown below, gives a longer term view of Market Psychology. Sentiment has declined beautifully which still infers multiple messages: Structural Complacency has been seriously damaged but the panic seems to be over for now and Bullish expectations will find a way to regain credence.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] The SPX found support whee it was supposed to and has now rallied over 100 points higher. There is resistance between the 1935-1945 area and if the bulls can push above that-then 1966 would be next.
The best fit from here, would be a pull back to the 1920-1895 area to make a wave B down. Once that low is made, a wave C higher to the 1966-ish area to complete the move higher. Without any bullish divergences, the door is open for the lows NOR being in place yet.