Sunday, October 6, 2013

Sideways Gyrations Continue!

With no clear message from the government to clarify the confusion related to Government Shutdown and Debt Limit, sideways market action continues. Futures are gaping down, but who knows by the time market opens Monday market, they might have reduced the gap down to zero.

In any case, at this point recent correction has lasted more than what was expected, and the buy signals are more than what were expected few days ago. This means that there is a higher potential of us reaching a significant bottom. However, since approaching IPM model is supposed to be a top, one of the following 2 scenarios might play out:

1- Market bottoms soon, starts a sharp rally. Pauses for few a days and then continues its rise
2- Market tops soon, and will decline sharply. Since DJIA has already declined sharply, topping scenario will best suited for Nasdaq and Russell 2000 and DJT.

In any case, I am writing this from JFK airport and will try to keep the blog updated while travelling abroad.

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