Monday, March 29, 2010
3 Down, 5 Up, Caution to the Bears
Here is the chart from the morning that I was finally able to post.
I wanted to notify readers that today's break above 1173.93 makes the decline last week a 3 wave affair. In addition to that, the rally from the wave C low is a clear 5 wave rally. As a result, I will exit my short position soon. If last week's lows are broken then I'll reshort. If the market falls back a bit and does NOT break last week's lows, then I'll get long.
Nothing more really occured the rest of the day since I posted this in the morning. The market is overbought on many levels but is not falling. And the little decline it did do was an ABC three waver which makes it look like a correction since the 1173.93 level was exceeded on today's rally. So at this point, any further liklihood of a sustained decline is getting dim. The market needs to prove to me it wants to fall further to correct this overbought condition by getting below 1161, or forming small impulsive declines on the 3min or 5min charts. Since I'm not necessarily looking for "the top" at this point, it's possible the ABC decline I labeled above is just the first segment in a double or triple zig-zag. Which means the market will decline lower in a corrective fashion, but still work much lower from current levels.
The bottom line is that a break below 1161 would open the door for an assault on 1153 support, and a break above 1181 would target the 1200 level.
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.