10-05-2011 outlook

I had opined the day would be flat Tuesday trading in a range below 1100 after an initial drop.  For most of the day that was the case, but the last hour we got an impressive rally and closed green.  Two days in a row that the latter part of the day behaved unexpectedly.

Read a couple of blogs and it seems most think we have set a bottom.  That may be true, but then again we may retest the low set Tuesday.  I am inclines to think that is a likely scenario and if we do retest a bottom today it would be an opportune time to consider buying the dip.  So my outlook is we start off flat, dip to test the low and then begin an advance.

Here is the SPX swing cycles:

GL traders.  It may be time to cautiously buy for a 4 day or so swing trade.  Do your own analysis.