Thursday, April 23, 2009
Bank Test May Trigger Biggest Part of Wave C Selloff; April 23, 2009
Nothing new to report today. The market was wild as the bulls continue to "hope" the market higher but in the end in the big picture, the market has moved nowhere since March 21st. My key level in the S&P futures of 859 held today so I remain bearish and only have one bullish position as a hedge (selling puts on Intel).
The bank stress test will be discussed with government officials and various banks tomorrow morning, and the government will disclose their methodology to the test. I expect it to be a dog and pony show with outstanding results. But the key is the market's reaction to the news. Right now the wave count I have sets up for big wave 3 down within wave C immediately. So I feel that the reaction to tomorrow's news on the stress test will result in a selloff. If for some reason it doesn't, and 859 in the S&P futures (861 cash S&P) holds tomorrow, then Monday the actual results from the stress test will be released and that may hold the big selloff day.
Bottom line: tomorrow or Monday should carry a big selloff taking the S&P toward my 761-780 target area as long as 859 in the futures is not exceeded first. I have all my same short positions and have gotten rid of all but one long hedge position.