Friday, January 14, 2011

Rally finally over?

The market rallied past the 1290 level as I predicted yesterday and it seems like it still has some more room left on Monday. With the rally today, my January target has been met and the current rally (from 1040) is now exactly twice the wave I labeled Minor 1 on this post below, which is a good Fib number to call this a W3 on Minor 3 or Minor 3 itself:

Longer Term Bull Count

So now we have to see what the coming correction will be like. If the wave that takes us down to 1100's bounces hard, it will probably mean we will see a huge market rally for the rest of the year. The only way I see this bullish intermediate wave turn would be a breach of the 1010 summer low, which at this point seems unlikely. So for Monday, I am looking for a break of 1278 and consecutive closes below it to call this a top. In the meantime, I re-shorted today the position I covered from yesterday at 1291.5. I will be selling my longs on the first close below the "level".

I will post a chart later as my chart site is slow today.

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