In the $ index, the long held, longer term bearish view remains in place, but the market is within the final downleg in the whole fall from the March high at 89.60 (wave V). Though this suggests at least 3-4 months of correcting higher and a minimum 5-6 rally after its completion (and potentially much more), the final bottom is likely not yet in place. As been mentioning, important time cycles across a number of final markets reverse in the mid Oct timeframe, while the seasonal chart for the $ index also bottoms around that time (see 3rd chart below). This in turn adds weight to the bigger picture view of another few weeks/month of downward ranging/bottoming before completing a more major bottom (see “ideal” scenario in red on weekly chart below). Switched the longer term bias to the bearish side on the March “false break” above the Nov high at 88.45, but will be watching for better signs/higher confidence of this longer term bottom (especially as mid Oct approaches) to switch out.
Nearer term, the market has sagged to yet another new low, but likely in wave 5 (final downleg) in the fall from the Aug 17th high at 79.50. Also, the apex of the Aug triangle (where the trendlines meet, see daily chart/2nd below) is occurring around this time (often coincides with at least temporary reversals), and suggests that risk is rising rapidly for a minimum 125-150 tick bounce. Note too that such a bounce move may be a short-lived spike (before reversing back down) given that bigger picture downside pressure remains, and part of a larger bottoming (see longer term above). Still short from the Aug 7th sell at 78.30, but given the rising near term risk would take profits here (currently at 76.15 for a 215 tick profit). Also, would look to reshort on a near term bounce/spike toward 77.30/40. Nearby support is seen at 75.80/90 (earlier low, falling support line since June).
