Quick update and chart on my post last week. The move down has satisfied its initial requirements with two 5 wave moves down very similar to what I posted should happen on the 16th (see chart then and now). Therefore, I am taking some money off the short table and moving to wait and see mode.
Now comes the hard and sometimes frustrating part...how the ensuing correction looks will give me an idea if 1) this down move is over and we get another big move north, 2) just the initial decline before a bounce and then another similar move down, or 3) the start of the huge decline. So basically 3 possibilities 2 with near term upside, one with long term upside, and one with long and short term downside...so no clue at this point, which is why I am in wait and see mode.
But, last and this week is how you make money trading the waves!
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New lows on the Dow today and the pretty clean 5 wave move down on the markets in the afternoon push me toward the bearish camp. I may go short with the bounce tomorrow morning with the expectation of a big move down Friday or Monday...anything less will have me covering.
ReplyDeleteThis would imply that scenario 3, or at least a derivation of may be in play...will know more by tomorrow afternoon.
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