Hello Mike,
Today's Program may be entitled "Final Landing" since the
indexes have now given us a potential map of its intentions. The format of
this email is that I will put the charts and comments on this page in the
morning and send you the updated charts later this afternoon so that we may have
as up-to-date information as possible.
Last week I put
out a video on YouTube describing my current views on the BKX. It drew a
lot of commentary and gave me a reason to re-evaluate the chart patterns to get
the "best fit." The red horizontal line is the neckline of an earlier head
and shoulders pattern that had a target of 33 in the BKX. That target was
met on November 21. In the process, we may have finished the right
shoulder of a down-sloping head and shoulders pattern. This may be more
valid than the earlier H&S pattern that I had illustrated and has an equally
bearish outlook. Yesterday the BKX crossed the down-sloping neckline and
this morning has been struggling in that area. Should it stay below, we
may see the new H&S pattern activated with a mminimum target of 10.00.
The SPX
expanding triangle is also related to the head and shoulders pattern nested on
the loweer trendline. As of this morning, it has not confirmed the
pattern, but should that happen in the next few days, we may see a minimum
downside target of 631 in the next few weeks.
The NDX also
carries the same message. Once it breaks through the lower
trendline/neckline, it favors a downside target of
836.
The Industrials
also show the same pattern. Should the trendline/neckline get broken at
7760, w should see a 92% probability of completion to 6280.
In summary, we
are at an important inflection point. The BKX is ahead of the other
indexes, signalling weakness and yet another decline. Should the other
indexes follow, we may be seeing the final descent into the 4-year low that is
now 26 months overdue.
Last Tuesday I
suggested that Gold was very near its overhead resistance. That proved
correct and we now see the decline beginning. This morning it has risen in
a countertrend bounce, but should continue its descent in very short
order.
Last week I
suggested that oil could rally, but it had a very strong trend channel that
might impede the rally potential. That observation proved correct and it
appears that it, too has resumed its downtrend. You can see that we have
taken out the minimum target for oil already, so I will be monitoring its
decline to see how close it gets to our next set of
targets.
Thanks,
Mike.
See you on
TV!
Tony
Anthony M.
Cherniawski
The Practical
Investor, LLC
P.O. Box 129,
Holt, MI 48842
www.thepracticalinvestor.com
Office: (517)
699.1554
Fax: (517)
699.1558
