Market Update 6-4-09 - more bull than bear

Not much to say except that I bought some longs yesterday and am now a lot more bullish than bearish for the short term.

Attached is the latest chart. Nothing has changed on the chart from the one I sent out May 14th except the market's updated track. Notice that scenario 2 is playing out very closely ("very shallow correction possibly making new highs"). There was a double top the week of the 18th on an intraday basis followed by a low on an intraday basis later that week. Scenario 2 had such a scenario playing out. The only thing I would like to change from that chart of May 14th is the expected length of Blue 2.

There is not really a reason to necessarily expect as large a rally as I previously laid out. The markets seem to have completed their first pattern up early this week with a good correction on Wednesday, possibly still playing out thru tomorrow (or completed Wednesday afternoon). What this could mean is that the first wave up is complete and the 2nd correction down is nearing completion (out of a total of 5) awaiting a 3rd wave up tomorrow or Monday.

The correction of the last 2 weeks was very weak and seems to have taken the shape of a flat or triangle (debatable) which also supports the market's strength. There is a pretty low chance now that the market is still in corrective pattern off of the May 7th- 11th highs, which leaves the bullish position as the most likely.

I will need to be nimble the next few weeks though, as this thing could turn on a dime, and when it does, that is all she wrote.

I will know more as the weeks progress and the market reveals more.

The safest bet is to buy with a breach of $950 which if I am correct could come tomorrow or Monday/early Tuesday (I went ahead and bought because of personal reasons and because I know at which point to sell if I am proven wrong--right now $900). If $950 is overtaken then all liklihood we are in the powerful 3rd move up and price should not intrude below $950 until this summer rally is over.

I hope you all like this blog better than the email. Hopefully it will allow for better interaction and understanding of my position. Also, be sure to check out my disclaimer at the end of the blog. As always I am doing this more for fun than anything and none of my comments are meant for advice. It is strictly a statement of what my opinions are.

Good Luck!

Chad