Friday’s action did not bring about any changes in the Alphahorn Swing System.  Though many indexes are very close to Alerts, none has been sounded as yet.  Therefore, we remain on buy/long signals for all indexes except Real Estate.  Interestingly, Real Estate-the most oversold of all the indexes-is now looking the strongest and the hedge might flip 180 degrees should things continue (i.e. Real Estate might bottom well ahead of the other equity indexes and could switch back to long, while they go short).  The precious metals on the other hand are not showing any signs of weakness, and silver in particular is looking very attractive.  Of the leading equity indexes, the Dow is the closest to a short/sell.  Watch the red/green indicator on the Dow ETF DIA.  Should the DIA breach 152.54 to the downside, then the Dow will be on a sell/short signal, but must close below that level to hold it into the close.

Friday’s action did play havoc on the EW counts.   Although the SPX channel held up, the Dow equivalent to SPX 1676(the minor wave 4 low) was breached to the downside. This means that my more bullish count became invalid for the Dow.  I’m not a big believer that the Dow and SPX can be on different counts, so I have a new bullish count that the major indexes are concluding or just concluded irregular flats for minor wave 4 (blue) and wave five should be kicking off relatively soon.  However, the bearish count that primary wave [3] has topped got all the stronger with the Dow’s weakness.   For now, I’m looking to the System to dictate the next trade.