Wednesday, March 2, 2011

Triangle on the S&P

The market bounced in what seems to be a W2 within the W3 or C wave so once the Triangle ends I expect the sell off to continue (a big sell off). There is however another way to look at this wave and consider the Triangle a W4 so we would just get another small leg down to test 1294 and then correct on a W2 wave. The trend is down and the market is under it, so I am expecting lower lows until the TA gets recaptured. Also, oil shot up over $102 and this will be reflected in gas prices few weeks from now. So any gains in employment or GDP are basically in jeopardy because gas prices serve as an indirect tax and in turn hinders growth. And if the Saudi Arabian oil supply goes into turmoil, the risk of another recession rises substantially. Also the Libya situation looks like it's going to last a while so oil will probably keep on rising.

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