10/16/2014 6:15:58 AM

Good morning Traders,

Wednesday's trade saw some level of short term capitulation. I would have preferred an ugly end to the day instead of a reversal. So we still may need some retesting...

On a weekly sentiment view, we still have some work to do.

But we are close to a short term bottom at least. In line with our call for an expiration reversal.

So far, this relationship between the SPY and QQQ has held true.

Our trading cycle suggests weakness into November.

But if our forecast inverts, we could see yet another leg higher.

So we've been looking for a low around this expiration, then a bounce. We may play the bounce to the upside, cautiously. So stay tuned.

Regards,