Tuesday, March 15, 2011

C Wave or Bearish Wave 1 of Wave 3?

The action in the cash market makes it hard to get a good EW read. However, the market sold off to the levels that I had posted yesterday and in turn satisfying my original target for a correction I posted on February 25th where I mentioned 1280 as a target. Now the big question is whether this is a correction of a larger degree or are we done now with the C wave I mentioned in late February. And I think we will get the answer in the next couple of sessions. The market will either retrace to a Fib area and then sell off HARD or we will rally now to a high above 1343. I lean towards a rally to test the TA just above 1300 and then the bearish wave should give us a clue. Normally, I would have gone long this morning as the market failed to take out the 1255 support. But I am cautious and rather add shorts after this counter rally is done. There is talk now of things not being as bad, blah, blah.. which is what is needed for a counter rally. Once this rally is over, we'll probably go into mania mode or panic..

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