The Hunt for Red October is over
That 1990 cold war era film starring Sean Connery was about a chase of Red October, a Soviet submarine. And how apropos to today’s cyber (and chemical) warfare with the same Russians (but under a different name)! History doesn’t repeat exactly, but it comes darn close!
Yes, it’s all red on my screen in this month of October! No need to hunt for it!! In my last post I laid out my line in the S&P sand and today, my Dow line in the sand has been broken. And this is it.
This is the 4-hr chart I sent to VIP Traders Club members on Monday
The two blue lines are major trendlines that has supported the market since mid-September. And they crossed over on Monday. That crossing was strong support but if it could be broken, it would produce a classic ‘overshoot’ that would herald a strong decline.
And a couple of hours ago, that is precisely what occurred. Here is the updated chart
That support has now given way and now represents very strong resistance, so that if the perpetual Dip Buyers could push it back up (highly unlikely in my view), it would find it difficult to move above the blue lines.
My best guess is that we are in a major third wave down – and we know what that implies.
As I have maintained, the Nasdaq is the leader on the downside – and here it is
Pretty ugly, huh? (For the bulls, that is).
The dollar pulls back
We have been riding the dollar bull but this week I believed we are due a pull-back and that is precisely what is occurring. I believe the start performer will be cable and this is my outlook
I believe odds favour a bullish outcome for the Brexit negotiations and a clear break above the neckline should herald further gains.
VIP Traders Club members are short stock indexes and long currencies.