The Rule of Reactions is always one to three. For a trend to develop, it must exceed the three unit of time limitation.

Dow for the Close

Posted on August 27, 2015 by Martin Armstrong

The Rule of Reactions is always one to three. For a trend to develop, it must exceed the three unit of time limitation. So we need the market to move higher beyond today. At the time of this posting, the Dow is trading at 16628. We need a closing above 16460 to help stabilize the market. A closing on Monday ABOVE 17069 will suggest that we may have a low in place. A closing BELOW 16899 will warn that we should retest the lows before proceeding any higher. A closing BELOW the Monthly Bearish at 15550 would warn of a potential March 2016 low with still the swing to new highs as early as 2017/2018.

So far so good. As long as this week’s low holds, then this market will stabilize. But breaching that level means we will swing down and the swing back up violently. Thus, nothing has changed as of yet and we are still waiting for confirmation on when the collapse in government will start to send U.S. equities nuts.