The challenge of what lies before us...

It's not totally appreciated that the United States desperately needs to re-industrialize even as it no longer has capital to do so. Most countries in history that have had to industrialize quickly (usually for the first time) also had to use labor in a brutal way, to compensate for a lack of capital. When you don't have money, you build your infrastructure in more labor intensive and less efficient ways. Also, bluntly, worker safety in these situations is usually badly compromised.

In the United States, the labor force is mostly in the process of retiring, and the young are fewer in number and not used to the idea of physical labor. Most of them want corporate jobs that won't be there much longer.

Put these two concepts together and you can see how intractable the future may become...

Japan ETF...

Here you see the Japan ETF EWJ as it works it's way towards the 1.00 node and perhaps the red declining trendline down towards $3 a share..The 1.00 node here occurs on April 14, 2009....

Market might pause here..but plenty of upside remaining...

Just a reminder, the 10 week cycle that helped produce this bottom, tops out on 12/23/08..not a prediction, but something to keep in mind...

May be hitting slight resistance on upside as we approach this trendline..

But I think it will carry well beyond it...

Note also that the dollar is dropping, which I mentioned might happen (back on the 7th of November) if the market started to rally...

The rally has started?

Remember I mentioned that two cycles bottomed around the 20th...Perhaps they are now working...

Not good! $NDX breaks trendline....

This is very dangerous...If the market is failing here, there is only support available at or near the 2002 bottom....there is a congestion zone at around 1000 and also at the 2002 bottom at 795..if that cracks, then the Second Great Depression is here...

There is a chance the market is producing wave 5 of wave 3 down, which would stop it before it got too much further down, but there is no guarantees in this market..I say that because there is a lot of positive divergence present, but that is not a signal, only a warning..

I'll be giving a live demo on Friday at HAL-PC in Houston...

From 10:00 A.M. to Noon...

The $SPX is sitting on a trendline from much further back in time then the $NDX...

http://logtiming.blogspot.com/

I'm using this other blogsite to archive charts..This one is interesting...

Click on the above link to see the very long term $SPX exponential charts...

Latest $NDX charts...

We've now reached down and penetrated the deepest of the trendlines...it's now or never, either the market rallies, or this set of trendlines are not then able to fully contain this Bear. I personally think a rally is still in the works despite the discouraging price action for the last month...

Market may be retesting it's lows..

There is a 10 week and 9 month cycle around the 20th of November, this may be the time period when the bottoming process finishes, unless some fundamental or political action causes a failure. This is probably the most treacherous market in decades...

It's possible that a drop in the dollar and a rally in the markets, may start at about the same time...

Something's about to happen to the dollar...

Notice the two Fibonacci grids on the $USD index chart. Both are the same size. You can see that the recent dollar rally is 1.618 times the size of the previous one. Also if you go deeper and analyse the current advance it has two legs, and they are also close to Fibonacci ratios. RSI is oversold and CCI is showing negative divergence...We are probably pretty close to the end of the dollar rally...This would be good for Gold and Oil and ultimately stocks in those commodities...

Well, so much for the idea of a post election rally....that's how it might seem...

But there may still be some more rally to go, after a correction..

Notice the rise in the breadth indicators after a very oversold condition...This would lead you to believe there's more to come...so maybe today's drop is a correction in a rally, not the end of the rally...It often rises to the top of the dashed purple channels before failing. But it need not make much price progress while doing so...It could just burn time...

But note that bounces off of a major time node, like this .25 node, are normally fairly substantial..more reasons why we might see more upside...

(Just to review, the .25 .50 .75, 1.00, and 1.50 are "major mathematical time points". Trend changes of some importance often happen there...The .50 and 1.00 nodes are the most powerful of the group)

election night situation...

For comparison purposes look at the BigCharts rendering of the same time period, which is the part of the top chart to the right of the thick black vertical line. It gives you some sense of the time compression involved in Exponential Charting...

It will be interesting to see what the election brings..

Probably a small rally...

Where we are now...

The bounce is clear on this chart...What has me frankly puzzled is that I expect a wave 5 down after this bounce is over, and all of the lower trendlines are sloping up. So either we bust these trend lines like we did the older ones, or we don't make a lower low on the next decline, which I have a hard time believing...

You can see in the top image the bounce has caught up to one of the blue trendlines and stalled a bit, but I expect it to go higher...

Where is the rally likely to stop?

I have a simple formula for using indicator divergence to estimate price targets. Originally I experimented with a formula in a book by Connie Brown, but after a while I came up with a variant I believe works better. None of these methods are foolproof, but currently using daily Stochastics, I come up with a target of about 1545 for the $NDX, which is a .382 retrace of the whole decline so far...

Positive divergence builds on $NDX...

In conjunction with the most recent and promising Exponential chart posted Saturday (see below), this conventional chart is showing good positive divergence with the price action on Stochastics,and MACD looks ready to cross-over positively...

Also from 10/31/07 to 3/17/08 is 99 trading days, from 3/17/08 to 10/27/08 is 161 trading days. Very close to Fibonacci on time...that is, the duration of waves 2 and 3 combined is very close currently, to 1.618 times the duration of wave 1...

Note also that the height from wave 2 down to wave 3's termination is approaching a 1.618 ratio of wave 1, which occurs at a price of 1132.5...

$NDX after the bell Friday...

This chart in conjunction with the one posted earlier showing a .25 node, could mean the bottom is in..but be cautious, as there is still one set of trendlines a little lower, at just under 1100, that could also be the bottom....

Futures are sharply down...Here are premarket charts..

The exponential charts on the $NDX show possible resting points at just below 1150 and 1100..

Here are three important $NDX charts, about one hour before the open today on Friday the 24th...
Notice we are still at the .25 node on the top chart..A buy condition is usually when you are at a .25 node and one of the trendlines is touched and/or slightly exceeded.. That condition may be attained today..
If someone put a gun to my head, I would say the bottom chart will provide the lower bounds for this move. If anything does...!!!

Complex .25 Node bottom still forming on $NDX...

Up to date....

It may start to move up on or around the 28th, as that was a 1.0 node on a smaller scale, or perhaps the 31st. as the end of months have a bullish bias...

Notice that the $NYSI breadth indicator is (so far) still respecting, but at the bottom of, it's old channel, The $NASI (breadth indicator for the $NDX) has shot down clean through it. Anyway you look at it, the markets are extremely oversold, and we are entering the most favorable time of the year....