Yesterday's 300+ down day was very unexpected and threw a wrench in an otherwise perfect setup. The rally I called for on Sunday's post was delayed by a day. We are now in the rally phase that should take us to the 870-900 level over the next few days or couple weeks. From there, we will give way to a large wave 3 down that will run right through the 740 low of 2008 and probably well down into the 600s. This rally phase we're currently in is giving me an opportunity to add to my short positions as it rises.
I do not want to miss the next selling phase. It should be feroucious, and should be somewhat similar to the October selloff, only not as large.
4 comments:
Looks like gold is about to hit $875 before dropping below $700. By April?
Check out this chart, I am just a newbie and decided to draw random line. Could the S&P goes as low as 580?
http://i270.photobucket.com/albums/jj112/kimmichaelp/Mike-3.jpg
Did we finish wave 1 of 5 yet?
http://i270.photobucket.com/albums/jj112/kimmichaelp/mike23.jpg
I have been wrong on gold for months. So I have no comment. But I'm overall bearish the metal.
There are some good books that talk about the rules of trendlines and technical analysis. I can recommend some if you'd like.
I'm not sure where we're at in the wave cycle. We didn't rally enough to be confident in an impulsive decline from 943 to be valid. It's possible, but not likely. A break of 740 would negate that and mean the final wave of this bear market is underway. As long as it remains above 740, a large violent rally is probable into the 870-900 area. From there, I would expect a clear 5 wave thrust to well below 740 and into the low 600s probably. Either way, the market is headed below 740 in the next few weeks.
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