Friday, September 3, 2010

Elliott Wave Update

So we got the 5th wave extension on "less bad" news. The fact that only 67,000 new private sector jobs were created, it's a bad sign for an economy that is supposed to be recovering. And as a businessman, I can tell you business is indeed slow.

On the chart, I see 5 clear waves completed and I expect a correction to retracement early next week. However, given that we are so close to the 1115 200 MA, I wouldn't be surprised if traders push it to that level to suck more people in. The 3rd wave is 35 points and if we add another 35 points to [4} it would project to 1110. I am holding my SDS positions until retracement and I'll be lucky if I can make a small profit from them. I don't think even the most bullish person could have predicted a 4 day rally that would take us from support to the tip of resistance in less than a week but as it is now, the market is bullish again and overbought and ripe for yet another sell off.

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