Here is the bearish failure scenario example from 2011:
Here is the bullish example from 1997:
I somewhat favor the 1997 scenario for a few reasons. One is we had an extreme quarterly close on McClellan that jives with a 1997 turn:
Under the 1997 scenario, the ideal turn would be around October 14, and there is also the October cycle low that I have been tracking which has an ideal turn of October 15. These cycles are not exact, but this week should mark a turn under the cycles. So, I continue to watch for a reaction to establish a low and then confirmation of that low.
Now, all the bearish data points we have been tracking through the summer are into bear territory and reacting bearishly. They are doing so off the long term bear wave 5 scenario I have laid out. So, this is really an important time for the market. If we fail to get back above support, or fail to hold support when we get back above it, the September 2014 high could end up being the high for year(s). As noted, as long as we are below the 125 SMA, this market is at risk for a more bearish eventuality.
I am staying with the bull scenarios for now as noted, but mindful of the possibilities that we are bearish. I would like to see 3 more years of the bull into 2017 under the bull scenarios.
There is always a bear path and a bull path. We cannot know which path our future will choose. As always, do your own due diligence, read the disclaimer, and make your own investment decisions.
I will post again when I see another setup (either from the long side or the short side). Good luck.
Peace, Om,
SoulJester
