Thursday, January 26, 2012

W4 correction in progress

The market finally made it to the 1330's area as I had been expecting for the past couple of weeks and now we are starting the W4 correction. Which form will this correction take is too early to tell but I expect it to at least test the Trend Average (it got close today). If we go by proper Fib retracements, we should see 1283 but it's hard to get an idea this early. The best is to look at the TA for guidance. I am going to start by assuming an ABC move so today's leg will have a retracement and then the C leg will kick in which I am assuming it will go under the TA. If it does that without reversing then chances are it is going to the 1283 area. However, if the TA holds then it will be enough of a correction for the market to go on to the 5th leg to 1378 more or less.

And per my post yesterday, I executed my plan as the market gapped up in the morning. So I am now short and holding some VIX ETF. I am setting my stops to break even on my positions.

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