Subject: Market Update March 11 2009
This is a quick update tonight as I am traveling in Baton Rouge this and next week for work. The bounce is finally here!!! I expect at least one more push higher and then it may be complete. This bounce will be similar in nature to the January bounce in size and power.
I have updated the chart and attached it. We are currently in the red zone I had laid out, so that means I will start buying some more puts for this final push lower. This will be an aggressive trade that I wouldn't necessarily recommend as this final move down will be really open ended...meaning it could be a very small move not making new lows, a large move to new lows (expected), or something very puzzling and erratic...who knows. All I know is right now the count is incomplete and we need another leg down to complete the big move down from Oct 2007. I will know more once it starts to show itself. I would use this next move to close out shorts as the next move should be a BIG multimonth summer rally.
What I do know is this rally CANNOT get above $800 on the $SPX or my count is wrong and I will have to close all my shorts and get long. That is a really long ways away, though, and I dont expect it to get close. Notice on the chart that even though Tuesday was a huge day, we still aren't even in the fibonacci retracement zone of 38-62% of this latest move down.
Heres what Im doing: Adding shorts awaiting final move lower, most likely to the low 600s, but nothing is definite and we will have to stay nimble in this volatile last leg.
Good luck.
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