According to my risk summation system, the day this coming week with the highest risk of a turn in or acceleration of the current trend in the DJIA is Wednesday September 21st. Also, there is a small cluster of risk turns on Monday and Tuesday not quite sufficient to justify a risk window label, but large enough to maybe enable some sort of half-hearted bargain hunting bounce up early this coming week going into the large risk window on Wednesday.
This past week the Monday-Tuesday 12th-13th risk window tagged what appears to be an important top. The Thursday risk window at first glance would appear to have been a dud, but it did catch the "top" of what may have been a failed correction in the middle of a large down trend depending on the action early this coming week.
My catching a falling knife Cable purchase worked out just as you would expect, with me getting stabbed. At least the Pound ended the week slightly above my entry point. The BOE meets this coming Thursday the day after the Fed and may help put a floor under the currency if they do and say the right things. Also, the Fed could help out if they don't do and don't say the right things this coming Wednesday, so I've got two shots at salvation unfortunately meted out by rather untrustworthy sources.
Speaking of the Fed, you really have to watch what they do instead of what they say. Take a look at their balance sheet below which is updated through this past Tuesday the 13th. Notice anything funny at the end in September when they are supposed to be reducing it by some 80 or 90 billion a month, it's rising! They're increasing the balance sheet, obviously trying to pump up the stock market which is swooning. I wish they would just admit that there's now three Fed mandates: full employment, 2% inflation and a rising stock market. Of course, there are still a couple of weeks left in September for them to get back on track and sell instead of buy, but I suppose that depends on the S&P, what a circus.
With the cotton-picking Fed pumping again as shown above, it's not clear at all if they will have the chutzpah to bump the Fed funds rate by a big figure this coming Wednesday. A 0.5% bump will probably shoot this nascent bear right in the furry spot between its eyes. If they do drop the big one, my downside target (purple line) for completion of the current sell-off is shown below somewhere in the 27,000 DJIA neighborhood plus or minus a thousand or so DOW points between the 50% and 61.8% retracements.
As I mentioned last week, there is a low probability crash window stretching from this coming Wednesday September 21st through Monday September 26th. A crash or a somewhat less dramatic large sell off would fit nicely with my short-term Elliott wave count which will be looking for a 3rd wave in a C wave in a three-part 5th wave down in that time window.
Edited by Douglas, 17 September 2022 - 07:10 AM.