Weekly chart directly below shows the S&P 500 testing the QE 3 up trend line, as per Greg McKenna's article earlier today, doubtless also watched already by many other traders and pundits. Chart is arithmetic scale, which as I have mentioned previously, often shows cleaner trend lines for the S&P than log scale.
The new down trend channel shown below on a 4 hour chart could be a useful measure of the S&P's behaviour in coming days. If the market is to rally from the QE 3 line to new highs, it first must break upwards from the down trend channel. Alternatively, the market may continue lower inside the trend channel, or an acceleration of the recent down trend would be indicated by a break lower from the channel. Don't rule out any possibility.
Thursday, 2 October 2014
Weekly chart shows that the Hang Seng has in recent weeks followed the path I drew for it back in early August. The Elliott Wave count I published at that time calls for the current decline to extend a lot further. First things first though, the market must break below the illustrated up trend line.