Tuesday, December 30, 2008
Rally Invalidates 5 Wave Decline; Dec. 30, 2008
In overnight trading, the Dow and S&P futures broke the beginning of the proposed 5 wave decline I labeled yesterday (see above chart) invalidating the wave count and conclusion that the trend was now down. With another failed test of prior support area in the 850s again yesterday, it's possible the rally to 950+ is underway. However it needs to get moving quickly because indicators and time are really not supportive of this move at this juncture.
I have not changed my strategy of holding fully short, and am prepared to add to my short positions on any significant rallying.