Equity markets remain in bullish impulse mode, despite drifting lower since Thursday afternoon’s high. If we apply a rule of thumb which requires a 30% retracement before we start taking a BC leg seriously, a further decline to 1267.25 would give us something to work with, as is shown on the attached chart. The bigger move up from 1068.00 on October 4 has pulled back by almost 28%, but because this has not resulted in a strong ABCD picture, we’d be skeptical toward a “D” target trade. Watch for a smaller pattern to emerge based on last week’s impulsive move up from 1216.50. (Posted by Doug “harry” McLagan)
