Tuesday, July 29, 2008

1-2-3 reversal

I've been pointing out in the daily updates for a couple of weeks that we probably put in the 22 week cycle low on the 15th. The market is now in the process of completing the 1-2-3 reversal to confirm that low. A close above 1282 will skew the odds highly in favor of the trend now being up for a while.

The transports and the Russel have already completed 1-2-3 reversals suggesting that the rest of the market would eventually follow. Until the selling pressure in oil eases we can probably expect the market to trend higher. Well until the market finally recognizes the fact that collapsing oil is actually a bad sign. Which it will do at some point. Falling energy prices = falling demand which = recession deepening. This all leads to much lower stock markets in the future. Which is exactly what Lowry's selling pressure is and has been telling us all along.