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While still very early in the day, if you look at
the chart from yesterday - but now turned into candlesticks - the bonds might
just be forming a 3 Black Crows formation. This is a trend reversal
pattern and since it is coming directly after the H&S pattern, would seem to
indicate what we have seen and that lower prices are afoot. Although the
S&P does, currently, lead the bonds, the fact that there is such a bearish
picture on the bonds, should give impetus to there being a decent stock market
rally.
On the other hand, the bonds have reached what
could be a strong bullish retracement, being .382 from the contract
high. Thus, the market is looking very bearish, but depending on how
the day ends, could equally end up with a bullish retracement. Much
depends on whether we have witnessed the, rather than a, new contract
high. The current, intraday formation, suggests that the intraday low may
get taken out and we then have a 3 Identical Crows finish for the week, to leave
a much weaker picture.
Where all this stacks up on the EW front, I have no
idea, but perhaps those that know will tell us.
On the day trade front, we never got an Oops, nor a
news reversal, but the bearish retracement from the PPI took the market to
within a tick of the pivotal high at 102^30 and if this holds for a DB then it
could get interesting. If it blows through...
By the way, I have a large down gap on my chart
from 8.45 to 8.50 central and I wonder if this is just bad data or did something
happen? Because a gap like that is quite telling. Anyone
know?
Bill Eykyn
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