Saturday, February 12, 2011

Update #2 - $Rifin Likely Topped!!!

The numbered cycle pattern suggested that to be consistent with the inverse of the August 2010 $Rifin bottom, a final shoulder should form.  That is exactly what has happened over the last several trading days.  Price was supported at the midline of the regression channel and the final shoulder is forming now. 

The entire 3-top topping process is sloped upwards which is why the final shoulder is a higher high.

It is very likely that the top is in (within a few points)!  Take a close look at the daily chart and compare it to the daily chart in my last update.  The reason I say the top is, in place, is because the lower turquoise expanding triangle ending diagonal line is exactly aligned now with the lower pink fork line.  If you compare this to the previous update, the 2 lines were not lined up.  I have not touched the turquoise line from the previous update, and just moved up the top corner of the pink fork line to match the higher high in the last session.

I hear people say all the time how the market is not "precise", or can't be "timed".  The market behaves in ways that are very complex, and it takes considerable time and effort to figure out the intricate patterns.  Yet it can be done. 

Especially now, the most common complaint of the market is that the Fed has distorted prices.  Manipulated or not, the market is currently trading with incredible precision and that means we can still identify the turning points.  The evidence is clearly shown in the way the pink and turquoise lines match up on the daily chart.  The geometry of two different chart patterns is matching up nearly perfectly over many months time.  

Some choppy sideways trading might be in order to finish off the shoulder, but I do expect that the high is in.  The market is vulnerable to an extreme selloff now since the topping pattern is basically complete.

30min Chart

Daily Chart


  1. To date, the top has held within a few points as my analysis suggested. $Rifin has also shuffled along sideways forming the shoulder. All the ingredients for a major downturn in the markets are in place now according to this pattern.

  2. A near perfect double top with April 2010 is also in place now as well.

  3. Great call-do you post RUT also from time to time?? Thank you

  4. Thanks. $Rifin topped last week on Wednesday, and did not push higher over the rest of the week as did $SPX. That was the hint that the turn was coming.

    Generally I think there could be just a touch more downside for mkts tomorrow morning, and then we could see a sharp retracement back up until this Friday. Friday/Monday and next week is when I think mkts really accelerate to the downside.

    Yes, I do follow $RUT as well. I have some interesting $SPX charts coming soon. After that I will post a look $RUT.