(Click on the pictures to enlarge)Could the small new top yesterday be it? I do think that wave v of the second Zig-Zag was very small, but it could just be it. Massive negative divergence has long been a warning, that we where closing in on the top. A nice brearish daily engulfin candle was seen in yesterday session in both DJI and the S&P 500 (best in S&P 500).
This morning on CNBC all the talking heads saw the move as a healty correction and they even said that Funds still was sitting on loads of money to invest... Sorry but, the last numbre I saw from end of June their (the Funds) cash-holdings was down to 4,2% just a fraction above the low point in October 2007, but as we have seen a continuation my best estimate would be, that they are below 4% cash-holding at this point.
A break below 9,726.26 and more importantly 9,634.72 in the DJI will confirm that this was it.
In S&P 500 the points will be 1,057.47 and 1,038.89.
There still is a possiblity that this is just a larger wave (iv), but 9,634.72 (DJI) and 1,038.89 (S&P 500) should not be broken at any point if this scenario should be the rigth one.
Time will show.
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