To "B" or not "B" topped out in equities? Checking for clues

Scared bulls yesterday, scared bears today - just a couple of reasons why it's good to be not bullish - not bearish - and not biased! Let's look at a couple of sectors and the ETF for the Dow Jones Industrial Average (DIA) for clues on whether the "B" wave has topped out. First a general comment - as you'll remember I've said including this morning, the wave count is provisionally marked as having completed "B" but hasn't yet confirmed. Want an easy way to know if it does? Well, aside from violating the recent swing lows, we'll know once sector after sector - and the broad indices - drop under their swing lows of early this month. The biotech sector ($BTK, not shown below) almost did that but struggled higher today to suggest it might pull off a bullish double bottom - will see. As for the banks, they actually staged a recovery today too but as you can see from the KBE chart below (main banks ETF), they've created a range in recent weeks just above support from the May high. They'll either break above that range, or below it - simple enough. The KRE (regional banks ETF) has created a different but essentially similar pattern, a contracting triangle over the same time period (since they couldn't manage a new high when KBE recently did). This is one sector that means a lot for the rest of the markets.

I've included the HHH (Internet sector ETF) also, given the interest in Amazon tonight. It's obviously been stronger, but sports the same kind of negative divergences that are plaguing other equities indices lately. The Internet sector may not make a new low, but they also look too weak to play a major role propping up the broad equities indices.

Also below is the DIA - it did well today, but let's allow it to prove that it can muster another new high. Otherwise, its wave pattern and technical weakness aren't great arguments to be bullish on it right now. My guess is we'll close out the week tomorrow without a definitive answer - but that's typical for a Friday anyway!

How about Terry Laundry's T Theory? If you go to his T Theory site (always in the list at right), you'll see that he's spruced it up with a pointer to his other T Theory Foundation site, where you'll find T Theory Foundation: T Theory Calculations, Daily Updates, Charts and Data at http://www.ttheoryfoundation.org/t-theory-calculations.html. This is the statement he posted this evening - but do drop in at his site links to see his charts and other work.

Oct 22th Comment: No change to mid Oct top. Just had a long Skype video with Peter Eliades. The small red AD T formed out of the early October low in todays chart has expired but the high ARMS Ratio of the past few days is just causing more topping. Terry

Bottom line: don't get too excited either way. As I pointed out this morning, trend reversal patterns - which I do believe we're seeing now - can have surprises before they confirm. Since we don't have confirmation yet - don't be too surprised if you're surprised by the volatility (in both directions)! Going much above that SPX 1095 level would say it isn't quite topped out yet. But unless and until that happens, today's sharp rise merely tested that broken 1095 support - so I'll give the coin toss to the "bearish" camp, and let the "bulls" see if they can prove otherwise when the games resume.