ORIGINAL POST: 9:15 AM EST
Friday we reversed right on target, tagging our trio of tightly-packed downside targets (1344-1348) before heading up. This morning, we’re seeing the continuation of the next leg of our forecast.
The dollar, which broke down from its rising wedge earlier in the week, came back and tagged its apex before reversing. The next move should be to test the channel bottom.
The EURUSD is a little ahead of the game, testing the bounds of the little channel it’s been in for about a month after breaking out of its falling wedge last Wednesday.
Stocks appear well on their way to our first upside target of about 1380. Look for SPX to at least pause around 1379-1383. This was the chart Friday morning.
And, here we are today, having reached our IH&S target in the first hour of trading.
UPDATE: 11:00 AM
As we discussed Friday, 1381.50 was perhaps the most significant level in our target range mentioned above.
Those who’ve been paying close attention will remember 1381.50 as the .786 of the 1576-666 crash. So, there’s an extremely good chance we’ll get some sort of reaction there. It’s also the .786 of the last wave down from 1391 to 1343.
But, a reaction at 1381.50 has even greater implications.
….786 reversals…frequently lead to Butterfly Patterns that extend to the 1.272 or 1.618 Fib level — 1404 and 1421 respectively.
The implications for the market if/when we reach those levels are huge. I spent the weekend revising my primary forecast, and will devote the balance of today’s post to what I expect over the next six weeks — which should usher in the most dramatic moves since the summer of 2011.
Quick membership note.
Not long ago, I added a monthly membership option. I understand its popularity with members, but it’s been a losing proposition for me — and ultimately to the membership. Every new membership means time devoted to site administration (setting up the account, emails, etc.) and time away from charting.
I intended monthly membership as a means of allowing folks to spread their costs out over time. While most have used it in this way, a number of members have signed up for it, gathered good information for 30 days, then cancelled their memberships — only to reappear a couple of months later requesting a new membership. Like I said, too much admin time for me — which detracts from the site.
I have decided not to offer new monthly memberships after Nov 21. Existing auto-renew members may continue their current $105/mo pricing for another six months if they like. But, those who purchase one month at a time will no longer be able to do so.
For those who have recently signed up, please consider a quarterly, semi-annual or annual membership. For anyone who converts from a monthly to an annual membership, I will rebate your last monthly payment and start your new annual membership at your next expiration date. In other words, your past month is free.
I will also extend the Red Cross promotion through Nov 21– meaning a 25% savings ($200) on an annual membership if you make a $100 or greater contribution to the Red Cross (see details on the membership page.) Obviously, this is a better deal than paying $105/month for the next six months. I will also delay the scheduled membership price increase until the end of November. Thanks for your time.
UPDATE: 11:30 AM
Okay, let’s get on to the forecast.
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