Sentiment Extremes in the last 3 weeks

From T&C forum post I made a few days ago: "Sentiment continues extreme, we have now 3 weeks straight with PC ratios over 1.00, today again at 1.03. This suggest we will get a short squeeze from Hell, before any Serious decline manifest, until then we remain in the 8/9L -8/31H trading range."

In the last post I mentioned about a possible flash crash Low in October, however, the extreme bearish sentiment the last 3 weeks was a serious concern.  

There is only one solution: Get rid of all those Bears first, with a powerful short squeeze rally from Hell. That is what is in progress now. Premature Bears needs to be careful.
 

The Flash Crash Cycle

The 5/6/10 mini Crash became known as the Flash Crash.

What only a few people know is that this Cycle has been in the markets ever since the Flash crash of 4/14/00.

The next Flash Crash is coming soon.

When exactly?: In October 2011. 

After it arrives, I will post on this public blog the cycle that suggests the coming Flash crash Low. 
 
If you are prepared for it,  it will be fun to watch unfold.

Monthly Bonds

We are following a 72 Month cycle, next due in September 2011, which is 360 months from the September 1981 major Low.

We have been in a (red) up channel since April 1986.

Intraday Change in Trend (CIT) Times 9/21/01

 

Intraday 5 min CIT (Change in Trend) Times are the red vertical lines 9/21/11: 10.10, 12.30, 3.30, 4.00 pm Eastern 

 

 Actual: 10.05 HOD, 12.30 Low, next is 3.30, 4.00 pm 

Open House (free week) at the Time and Cycles Forums starting 10/9/11

There will be an open house (free week) at the T&C forum during the week of 10/9-10/16.

You can start registration now but the accounts will be activated on 10/8/11:
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Click on "Register for Free Trial"

The T&C Forum is a collection of knowledge contributors, which includes a daily Live Chat at www.timeandcycles.com

Please tell all your friends and join us at our open house!


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78.6% retraces and the 9/12-13 cluster CIT

On 8/26 (http://timeandcycles.blogspot.com/2011/08/786-has-been-ruling.html) and 9/6 (http://timeandcycles.blogspot.com/2011/09/intraday-review-of-make-or-break-day.html) I mentioned that the 78.6% retraces has been turning these markets.

Here we are a couple of weeks later and the markets are close to down channel resistance around 1196 SPX and again right at one of those old 78.6% retraces.

 I had a 9/12 Solar CIT (90%) and a 9/13 double geometric CIT (70-80%) and 9/12 was also a Cycle CIT.  We declined into 9/12 Solar CIT and reversed sharply out of it, making 9/12 an ideal swing Low.

The 2 green vertical lines (click on chart to enlarge) were hourly CITs.

The 1st hourly CIT was an Apex CIT close to the 9/12 intra day Low.

The last hourly CIT was the 1st hour today, which was this morning's 9/14 1st hour Low of the day.

Intraday Time and Cycles 9/12/11

Intraday 5 min CIT (Change in Trend) Times are the red vertical lines 9/12/11: 1st hour, 9.35, 11.15, 12.40, 4.05 pm Eastern

Actual: 9.35 CIT was a 9.35 Low

Intraday Cycle are the Cyan lines: 9.40L, 10.30H, 11.15L, 12.30H, 2.00L, 3.30H (or Inverse)

Actual: 9.35 Low

9.35 CIT was a Low, but will it hold? Today should be interesting to watch.

Intraday Review of the Make or Break day

At the T&C Forum (http://www.timeandcycles.com) early this morning,  I mentioned in the Live chat (http://www.timeandcycles.com/board/chat/) that the Low was most likely in,  as Major channel support held right at the opening Gap and at the 78.6% retrace

"09:37:00 ‹RajaCar› Possible Low is in
09:41:18 ‹RajaCar› Often, when you get these huge Globex down nights, everyone gets beared up and the 1st 15 minutes will be the Low of the day. Today is also a Low am to High pm day, so we'll see.
09:41:58 ‹RajaCar› and yes, we also hit channel support and that 78.6% retrace level"

The intraday speculative path was the Cyan Lines, the vertical red lines was the intraday Change in Trend (CIT) times (click on chart to enlarge). Notice the 10.40 CIT was the retest Low of the day.

Make or break Day

Globex futures are down -28 SP's at the moment.

Major Make or Break (MOB) support is at the 78.6% retrace at 1144-45 SPX area, which is major Up channel support as well.

The market has reversed the last 3 times we touched the 78.6% retrace.

If we manage to close below the 78.6%, it would be an important Change in Trend to watch.

Premature Bears?

From last night's email:  
"Amazingly bearish sentiment remains High as PC ratios remain High, closing at 1.12 today. This supports the brief pullback idea before heading even higher afterwards. Most every E-waver on the various boards believe we are in a corrective wave 4 rally from the 8/9/11 Lows and everyone is expecting the next shoe to drop with a 5th wave to lower Lows. What everyone knows is not worth knowing or so the saying goes. This rally should last longer than most everyone expects."

The premature Bears are getting killed today as we rally to higher Highs.

PC Ratio is at 1.42 this morning with the market up +14 SP, is something brewing that the Bears know?

Gold weekly Change in Trend?

We saw a regular 55 and 89 week cycle arrived at last week's All time High at 1894 that touched the double upper Trend line resistance and reversed and dropped 177 points into 8/24 Lows.  

Corrections since November 2008 Lows:

1. 138.40 02/09H - 04/09L

2. 168.40 12/09H - 02/10L

3. 102.50 06/10H- 07/10L

4. 103.00 12/10H - 01/11L

5. 177.00 8/22/11H - 8/24/11L => Potential CIT to watch!

This is a noticeable Change in Trend wrt to the last 4 corrections since the November 2008 Lows, when the 3rd steepest uptrend began as we saw a sharper decline (177) than the last 4 corrections in a shortest amount of time (2 days).

Despite last week sharp reversal lower, as long as we remain above the 3rd higher trend line, currently at 1564, the trend remains bullish. A decline and close below 1564 would be bearish.

78.6% retraces rules

The 78.6% retrace has been ruling the recent market action as it retraces the recent swing Highs and Lows the last 3-4 times. This of course will end soon.

Today was an important day to watch for the next direction of the markets. A breakout is due.

Cycle Review and Update

Since my last Cycle update and review on this blog on 8/5:  

http://timeandcycles.blogspot.com/2011/08/quick-review-cycles-and-trapdoor-to.html

1. The markets were expected to bottom out on the 8/8-12 week,  which it did on 8/9 Major Low

see the 8/11 blog post  "7 reasons for the Low to be in this week"

http://timeandcycles.blogspot.com/2011/08/alert-7-reasons-for-low-to-be-in-this.html

2.  Cycles above (click on chart to enlarge) then suggested an 8/16-17 High and a sharp brief pullback retest Low into 8/18 Lows, which was the 8/22 Lows. From there we were expected to rally into 8/24 High. I had an hourly CIT at the close 8/24, which was the High at the Open today. 

3. What is next? Cycles are mixed as to what to expect as alot will depend on the next timing CIT coming up by this weekend. I have a double geometric CIT due on 8/26-28 and Mercury goes Direct on 8/26, it should be important to watch. (The rest is reserved for subs)