Monday, August 15, 2011

Now a Correction..

The market continued to rally as I was expecting last week but it's now time for a correction. At a minimum we should test the TA which is now at 1181 but more realistically I'd say we should see half of the rally corrected, so the 1150's. And at this point I think it's a good idea to use the TA as a stop as the market could resume another strong bearish wave. However, as long as the market can stay trade above the TA we will the rally continue to perhaps 1250 or even the 200 day MA. Hard to see if these 5 waves that just completed is an A or a W1. If an A then the rally will stall in the 1250-1280 area. But if it's a 5 wave structure then we're easily headed back to the 1300's. I was originally planning to buy this morning if we opened with a gap over 1186 (which it did at 1187) and use the TA as a stop. But I unfortunately overslept.. oh well. Still, the Chinese stocks I bought Friday went up 4% so it's all good.

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