Futures Down 1%

Futures are showing weakness into the open, possible short term reversal set for the beginning of the weak. As shown below the /ES never made a new closing high, and the /NQ is right at resistance. Also the dollar seems to be gaining some strength and setting up for a near term reversal.

The question is whether we are going to see another buy - the - dip scenerio. I think everyone is starting to feel like the top is extremely close and that October is going to be a bad month. We are going to need some bearish formations on the weekly and monthly chart set up going into next month. Last week's weekly candle was not very bearish at all and actually looked pretty bullish to me. The weekly chart shows we should make some type of retest/new high this week before any type of major drop. So we need to see weakness at the end of the week(s) and month of September for any hint of bearish action soon to come.


Here are two more charts that I'm looking at. As most of you are all aware of there are two ways to plot the charts, in normal or log (%) scale. Plotting trendlines in the two different scales gives two different results. I've seen everyone now charting the ascending wedge formation in the SPX and when I went to draw the trendline for myself I came up with a pretty interesting example of why you should use both types of charts. Below is a comparison of the Log to Normal scale:

Log:

Normal:

Interestingly when drawn to normal scale, the resistance goes all the way back to November support. When drawn on the log scale it cuts through the prices and wouldn't normally have been considered a real trendline. There is added significance to this trendline now because there has been so many touches/tests in the past couple of months. 

Below is a chart of my prediction to come over the next couple of weeks. I do believe we will see one last push higher because every chart that I've seen in the past reaches some Fibonacci target. Therefore I cannot see us topping out right here in the middle of nowhere. 1066 is the retracement from the August top of 2008. Seems like a good place to start. 

Lastly I've gone ahead and updated my 1937 chart. My chart made its way onto CNBC (note the title and CNBC's terrible mockup). This was actually an old version that Nenner got a hold of when I was comparing the Q's vs the 1937 INDU. I've been in communication with Nenner since I found out he was watching my chart. Apparently it was sent to him by a bank in Europe. I'm not sure if this being reported on CNBC is a good or bad thing. Its neat that it got some recognition, however now that CNBC has showed it I'm sure Goldman Suchs will change a few algorithms in their HFT to avoid making "history repeat itself" :

Click Here to Watch

Here is the chart showing we are very close to the top: