Crunch Time

BOTTOM LINE: Risk and related assets retraced between 50% and 76.4% of their post-Dubai declines. The retracements so far, look corrective. Currently, pivots lie about 1.7% either way of the market. That much lower, and the corrective nature of the most recent rally is confirmed. That much higher, and 2009 cycle highs are exposed. For a host of reasons, I think that we break to the downside.

Here is an hourly chart of the German DAX. The rally following a very neat "Dubai" impulse lower is clearly corrective so far.

For technical "geeks": I count the impulse from early November lows to have finished at what, for most indices, is a secondary, later, lower high on 25 November, not an earlier high of 18 November. Of the major global indices, only the DJI managed to break the 18 November high.

Below is an hourly chart of SP500 futures. The count in purple was made 3 weeks ago on 11 November, and the final purple "5" never materialised. I think the red "5" took its place, and is a failure in all but the Dow.