Wave Structure Unclear, but Trend is Down; Jan. 22, 2009

The stock market has not be following my projected paths laid out in the previous posts telling me that something else is unfolding. Momentum indicators, breadth, and the wave count are all giving unclear and/or conflicting signals. This tells me it's likely we're still in some type of correction, whether it's in a B wave down, or some type of triangle at some degree is unclear. The one thing I'm fairly certain of is that the larger trend is still down, and 740 in the S&P will be broken. So my strategy is to remain about 50% short, and add short positions to rallies or when wave structure clears up in preparation for a break of 740.

Once 740 is broken, a significant bottom, or THE bottom could be in at any time. So I'll be working on exiting short positions and getting aggressively long for a multi-month or multi-year rally.