Thursday Market Action

A ho-hum,  slightly downward day, with the major indexes slumping a bit over a percent, NASDAQ -1.30%, SP500 -1.19%, DJI -1.03.  The action was similar in the three indexes, a slow slide down from an early morning high.  The size of the slump was in proportion to the relative  non-blue-chipiness of each index.

That might be somewhat interesting, and this might, as well - depending how things develop. Yesterday and today, the SP500 hit an angle where two competing trend channels cross, just a couple of points above the 50% retracement level of the wave 3 drop. This daily bar chart shows what it looks like.

A valid trend channel should connect the extremes of waves 1 and 3 and those of two and 4 with parallel lines.  Similarly, the movement of the counter-current wave 4 should be contained in it's own parallel channel.  Wave 4 should now be over, with wave 5 ready to start.  Time tendencies are positive coming into weekends and holidays, so that could buoy the markets up through tomorrow.

September is traditionally a tough month for stocks.  Of course, this is just a tendency, and no sure thing. But it looks as if everything is lining up for the next leg down to start any time now.
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