Critical couple of technical days coming up for the longer term bull market as we have bullish divergences building on a short term basis at this time (that of 4-6 weeks). Problem is that the growth area is starting to collapse now (primarily in the small and mid cap issues), and if these same internal divergences break down near term (that of days), then the current declining price sequence is likely to pick up speed to the downside toward the current chart objectives of challenging the lows of September and October of last year. Internal "whispers" are suggesting that a full scale capitulation sequence is now needed to cleanse the system completely (to provide synchronization between the market indexes) before any notion of an internal foundation, from where prices can later build on, can be created. It would seem that a solid move above the 5% level in the 10 year note might the actual trigger to such an event, with the time window for a possible bottom in prices then moving to sometime in mid November.
Between now and then, we have a Fed meeting next week, with the FedWatch tool touting a 97% chance of no change in rates. What's interesting, however, is that the December meeting is now showing a 29% chance of another 1/4 point hike which wasn't on the radar 2 weeks ago.
We'll see how it goes.
Fib
