I think the market high today of 1246 satisfies the Ascending Triangle target as well as the Inverse Head and Shoulders projection I posted on August 31st. This coincides with what again seems like the end of a 5 wave move and a Shooting Star candlestick pattern. A negative close tomorrow would confirm the start of a bearish trend. However, I am looking for consecutive closes below the 1230 level to call 1246 the top for this leg and perhaps the entire rally from 1040. How the market corrects should give us a clue of where we are in the overall picture. There is a good possibility the market is ready to retrace the entire rally from 1040 and right now the 200 MA and 34 EMA look like good support levels.
I re-shorted today at 1245 and in the process improving my cost average by 15 points. So technically my cost on my latest SDS position is now 1227. I am keeping my FXI hedge just in case the market wants to go up some more.
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