Saturday, January 30, 2010
A Major Top is in; Wave  or C is Underway
The bottom line is that all the major indices have make stong breaks and closes beneath their previous support/resistance channels that held them in check for many months. The S&P closed well below 1080 on Friday with the bearish internals to convince me that the move was deliberate, and meaningful. Also of note, some of the declines in the major indices and sectors can be counted as 5 wave affairs. The combination of these two factors alone strongly suggest that a major top is in and that the big daddy bear market has resumed. Ultimately, the S&P should get to beneath 666, and much faster than the 10 months it took to rally off of that level.
If this count is correct, the power and force of this new downtrend will be so fierce that playing or planning for rallies will be a fool's errand. I may point out from time to time probabilities of rallies occuring, but rarely will I change my market positions, and I will never get long, except maybe to hedge slightly, at any degree. Simply put, the larger trend now is strongly down and my main strategy will only be to add to my short positions on big rallies, if they occur.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.