Outlook for equities markets on 10/2

Morning all - I don't see a daily map from ChartsEdge yet, so will have to put that up once I see one available. So what's our outlook for today? Not only is the daily chart of S&P 500 at potential moving average support as I showed last evening, but the hourly chart indicates potential MA support too. From the Elliott Wave perspective, either this is a very deep 4th wave pullback - possible - or there was a failed 5th wave already and we're seeing the first set of movements downward - also possible, but makes for a weird "failed 5th." Then again, frankly, there are some flaws with any interpretation of the waves, which I won't go into but you can get a flavor by reading the comments of Elliott Wavers who post at Tony Caldaro's OEW blogspot (Tony's site in the links listed at right). There is a gap that might want to be filled at about 1012 in the SPX, although that would bust under the parallel channel trendlines also giving potential support to price at this level. So daytraders need to consider the possibility that a 4th wave really has been working and may be completed already or at any time soon, with a 5th wave up that theoretically can still poke to a new high. I've been pessimistic about the level to which a new high can go, and have posted that here with comments accompanying my monthly SPX bearish fork chart. But if it works out as a diagonal - and we already have overlap of this potential 4th with the prior 1st wave - it doesn't need to make much of a new high (and yes, it can fail for a truncated 5th, even if that 5th still remains above).

Sure, a lot of us thought there may be a triangle, and I had posted with that idea some thought about where it would prove wrong, which it proved yesterday. Similarly with the dollar, that it might get resistance at that gap. But as I showed last night, the dollar also tested back up to that broken Fibonacci level that could have (but didn't) provide support. Broken support becomes resistance, so that's one important element here.

Some "analysts" are raising price estimates for various company stocks this morning - how timely, eh?! Doesn't it just boost your faith in the game?! Well we just need to focus on what the levels, wave patterns and indicators are saying. With price being the ultimate indicator, we know the market is weak, but hey - we already knew that we're tracking a bear market rally, right? Well - I know that some have a more bullish view. But work with me here - taking the bear-market rally "B" wave as our dominant hypothesis, we knew and know that it will top out anytime now. We'll know that it did if it fails under that 1012 level and then also fails 992. Meantime, let's remember that "picking tops" can be just as stinky as "picking bottoms"!

So as always - careful out there, and happy market navigating!