[newsletterchapter2 title=”GENERAL MARKET COMMENTS”] The BABA Reversal was the Tell of an interim High, as I allowed. The current viral cascade of negatives usually culminates in a Capitulation. We are in that zone. But, Extreme Sentiment does not, by itself identify a Low. Timing patterns and cognitive conditions are equally important. Investors are shocked. Talking Heads do not want to know what they do not know.
This is actually a normal and lawful Correction. Who knew there as a cogent profile for a 9/19 High followed by a Black Hole due near 10/13? Hello, Someone did. That was a great trade which is now over. Fundamental stories and Rationality are supposed to rule? They don’t. Markets are always under the influence of Energy patterns. That is: Markets are ruled by esoteric noumenal indicants rather than phenomenal fundamental tales. This has been a wonderful market episode. Enjoy.
[/newsletterchapter2][newsletterchapter2 title=”MARKET TIMING FACTORS”] A Negative Price Magnet (Black Hole) has been due near here. It produced extreme volatility and some panic. This unique indicant often produces a price vacuum synchronicity with a Capitulation. But this may not be an absolute Low! A defined Low is due nearer to the Elections. If the Capitulation has occurred, prices may still just churn around into 10/23ish.
[/newsletterchapter2] [newsletterchapter2 title=”MARKETS AS METAPHOR”] Financial Culture has gone from Ebullient Complacency to Pure Panic in less than a month. The Market Mind has “Changed.” This infers further woes. It is more than a “Buy the Dip” correction.
[/newsletterchapter2] [newsletterchapter2 title=”RELATED MARKETS”] Gold held up relatively well but it hasn’t been able to go anywhere. Treasuries just had a helluva short covering spike. The Dollar put in a Spike High. Energy is now in a Capitulation zone. Look for Long ideas.
[/newsletterchapter2][newsletterchapter2 title=”SENTIMENT INTERPRETATION”] The best Sentiment interpretation remains that the BABA High was quite cogent. Exceptional Low sentiment has not produced any obvious Reversal. Equities are in an ideal Black Hole. The “0%” readings confirm a Capitulation process but do not provide exact timing. The preference to, “be cautiously pessimistic,” remains but one can “sense” that real Buyers are lurking amid the most recent carnage.
[/newsletterchapter2] [newsletterchapter2 title=”THE TECHNICAL VIEW”] The bulls have dug themselves a pretty big hole here, where some serious technical damage has been done. It is quite oversold and if lower is needed, we could see the SPX trading at 1816 or even 1775 before a low is made. Once they find a low-the first real resistance doesn’t come into play until 1900-ish. I am expecting some type of short term low soon.