Constructive near-term action told us to maintain our bullish near-term stance, and today’s price
action showed us why. The indices again extended the up leg via a notable up day, and again set a new
round of highs for this recovery off July’s lows. The NDX took it a step further by peeking just a bit
above April’s highs, thereby visiting the highest levels that index has seen since 2008. Boy this up leg is
persistent. The indices have been on the rise for 30 days now. In 19 of those sessions, price has closed
higher. That doesn’t seem terribly impressive by itself, but it is when you consider that eight of the
eleven negative sessions occurred in a ten-session span. So outside of those two weeks, during which
price basically moved sideways, the indices have closed higher in 17 of 20 sessions.
This strength absolutely creates a major test of our mid-term forecast. For a very long time, we’ve laid
out a very specific path that we expect price to follow. We have expected higher prices in the nearterm,
followed by a larger mid-term decline off April’s highs. The larger mid-term decline would then
be followed by a resumption of the long-term advance. Obviously our near-term expectations have
come to fruition, and price has provided absolute confirmation that our bullish long-term forecast is
on target. However, the mid-term forecast is under fire. There simply isn’t much more room to move
to the upside before we really have to question whether a larger mid-term decline will occur or not.
That’s what makes action from here so important. With the NDX fully testing April’s highs and the
other indices not too far behind, it is very clear that a high must occur pretty darn soon if a larger midterm
decline is in the works.
action showed us why. The indices again extended the up leg via a notable up day, and again set a new
round of highs for this recovery off July’s lows. The NDX took it a step further by peeking just a bit
above April’s highs, thereby visiting the highest levels that index has seen since 2008. Boy this up leg is
persistent. The indices have been on the rise for 30 days now. In 19 of those sessions, price has closed
higher. That doesn’t seem terribly impressive by itself, but it is when you consider that eight of the
eleven negative sessions occurred in a ten-session span. So outside of those two weeks, during which
price basically moved sideways, the indices have closed higher in 17 of 20 sessions.
This strength absolutely creates a major test of our mid-term forecast. For a very long time, we’ve laid
out a very specific path that we expect price to follow. We have expected higher prices in the nearterm,
followed by a larger mid-term decline off April’s highs. The larger mid-term decline would then
be followed by a resumption of the long-term advance. Obviously our near-term expectations have
come to fruition, and price has provided absolute confirmation that our bullish long-term forecast is
on target. However, the mid-term forecast is under fire. There simply isn’t much more room to move
to the upside before we really have to question whether a larger mid-term decline will occur or not.
That’s what makes action from here so important. With the NDX fully testing April’s highs and the
other indices not too far behind, it is very clear that a high must occur pretty darn soon if a larger midterm
decline is in the works.
