Intermediate term anyways...and nothing goes straight down. There will be sharp rallies if this holds any predictive power at all. You have to have a really good study of the OEX weekly...a move back above both the 34 and 89 ema's then this scenario will probably be avoided. Note a ton of other possible resistance at 640. You have to do some comparisons of indicators that I've boxed then and now. Also keep in mind that OEX has so far topped in Oct. 07 right at the .75% retrace level. ...and coincided with the Fed starting a new rate reduction cycle...a very aggressive one I might add! Remember that the Fed started an aggressive rate reduction cycle in January of 01 with a surprise 50% cut. I've put a count on the daily...whether it's right or wrong....if the move from the 735 top to the 582 bottom was only the first leg....then an equal leg from the very recent high would take us to 488. ...Which is the late fall 2002 high and would be a 75% retrace back to the March 03 low from the 735 high. Beware of a 34/89ema cross..and remember BKX.
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