Wednesday, March 4, 2009

One More Rally and Decline to New Lows; March 4, 2009

Just thought I'd add my 2 cents with this S&P futures 4 hour chart. It appears like a 3rd wave, within a larger 5th wave, completed yesterday and is now rallying in a wave 4. So far there are only 3 waves down but the past couple large 5th waves over the past 18 months have actually fallen in 3 waves and kicked this elliotician in the twins a couple times already. So I'm on guard for this to happen again.

The chart above shows a prior 4th wave area in the 38%-50% fibo levels at the 750-770 area. If it is a 4th wave, I will probably go heavily short against a tight swing high, and purchase April or June call options for protection. If a triangle appears to form, I think I'll sell March or April options against a short position to try and collect some premium before it thrusts to a new low. Either way, I won't get aggressively short as this is a bit late in the game and the larger structure should be ending any time now and large ferocious rally should ensue for several months, at least.

Anyway, just thought I'd comment.

Gold and silver look to have topped and their 2008 lows should be broken in the coming weeks before they make new highs from 2009.

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