Oops, wrong direction.
The 65 minute chart breakdown will take a minimum of a couple of days (about 12 bars) to stabilize and turn.
The cycle bars are just extensions of the ones from last May, they look like they are in the ballpark.
Generally closing below the BB's is good for a bounce, except when it's the start of a crash. I do not discount a crash (10% decline) here. The markets are under extreme pressure, like a hedge fund is liquidating OR the Volatility Hedge Funds are pushing prices around as we go into options expiry next week. Whatever the cause, the selling today felt panicky, the pressure on the downside was relentless.
Now, I would really like to see a bounce but the MCO is at -125 which is hardly oversold enough to start a runaway on the upside. So far the MCO metrics are holding up and potentially we could see a positive divergence develop between price and the indicators. So far I don't think it's going to happen over the next couple of weeks and any rally will fail taking prices to new lows.
While I generally pay little attention to the fundamentals, I do think it is difficult to understate the difficulties present in the current economy. I also believe that the Fed (G5, M9 and whatever spooks there are left) will do whatever it takes to try and save the economy.
FIRST IN LINE to be BILLED for this rescue is the common shareholder, the FED has essentially said that the Common shareholders of FNM and FRE are screwed, just like the shareholders of Bear Sterns were. I read this to indicate that any other financial institution which falls down the debt rat-hole will suffer the same fate. This uncertainty is rubbing off on other equity issues in a mad rush to convert assets to cash, or at least protect profits and equity.
I've been watching the markets since the late 70's and of all the spooky declining cycles I have seen this is one of the worst. Generally speaking I have a bullish mindset but the current market feels like an exception to the general technical rules in the sense that some of the events are "out of limit." This means that one can be trapped by assuming the charts will behave like they have before, and this is true, IF you have enough data to see what CAN happen because it did one before, 25 or 30 years ago.
On the other hand, when it does bottom, whoop-de-doo!