Market Looks Poised to Reverse Hard to Downside Within Days
Reversals in the market often come when few expect them -- whether they come near bottoms or tops.
The patterns that I am seeing are based on crowd behavioral Elliott Wave analysis, and this analysis now favors a 70% probability of a bearish decline beginning very shortly to the 1150s area on the S&P 500 index. To wit, Investment Advisors in recent surveys have over 45% bulls and only 30% bears with typical tops forming around 47-48% bulls in surveys. In addition, the rally has been on light volume and recent action seems to be forming a rising "bearish wedge" pattern at the same time.
Reversals in the market often come when few expect them, whether they come near bottoms or tops. My most recent forecasts called a bullish turn after Thanksgiving Day when most were bearish in the 1160s on the S&P 500 index. We then rallied 109 points to a 1267 high, which we are re-testing now. As we recently pulled back into the low 1200s, I again said to watch for a major market turn on Dec 20. We then immediately rallied so far into the 1270 area from the 1203 lows.
Below is a chart I sent out on Dec. 24, having projected a continuing rally into the Dec. 27-29 window of trade.
Editor's Note: David Banister is the chief investment strategist and co-founder of ActiveTradingPartners.com, a small-cap portfolio and market advisory service.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter