The Dow closed neutral on our indicators for the month-end of October. We have held support below and bumping against resistance. There are only two possible patterns which is either sling-shot, penetrating last year’s low and then swing to new highs is a blast to the upside. Or, we simply base and then enter a Phase Transition.

The fascinating aspect is looking at our Energy Model. We can see that despite the rally in October, the Energy turned negative in a full blown divergence. This means that the over-bought position of the last few years is being resolved. That opens the door for a Phase Transition.

Now look at the DAX. It bottomed WITH the ECM one day ahead of the turning point. Many individual stocks bottomed precisely with the ECM. The DAX did penetrate the previous year’s low intraday. The closing now for year end will be absolutely critical for the survival of Europe as a whole.