Monday, April 4, 2011

One more push up?

I re-labeled the waves on the chart to reflect an extended W3 on the rally from 1249. The market seemed to be in a W4 type of correction and I think we will see a rally that will challenge 1344 as soon as tomorrow. By looking at the waves, there is a good chance the market will make it to 1355 and there are bullish divergences that support this view. I think once we finish that wave, we can safely expect a 40-60 point correction. I am currently in cash waiting to short when the W5 appears or go long at the retracement. Seems like the market will not go into any significant correction until earnings season is over and official announcement of QE policy.

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