Editor's note: The following analysis was offered this morning via Scott Reamer's technical service. We share this vibe on the 'Ville with educational intentions only. For more information regarding Scott's unique approach, please click here.
For the last 19 days the DOW and SPX have been defined by a 150 basis point range: something will give in one direction or another.
Our long term models still say that an important (broad) peak is forming here rather than a sideways correction. Watch closely DOW 10,660 and SPX 1211. We must respect a serious break above these levels as it could lead to new annual peaks (which according to our models would delay the long term bearish resolution though it would likely not eliminate it at all). Otherwise, a break below DOW 10,479 would be the first in a series of important signs that the decline we have been patiently waiting for has arrived.
Remember, peaks are broad, time consuming events; not usually spike-y affairs. The markets are putting in some very important and extraordinary action here (keep a very close eye on the Transports); don't let the low volatilities lull you to sleep; now is the time to be at your sharpest...
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