The day started as I had hope yesterday with a test of the lows and then reversing in a bullish wave to 1150. However, gains were not able to hold and the market deteriorated into further selling. The early rally was probably caused by shorts covering and in the process leaving a long "shadow" in today's candlestick, which is an inverted hammer. That increases the chances of an reversal coming early next week to either retrace this bearish wave to a Fib area and test the TA in the process or launch into a very bullish wave to 1200. I tend to favor a strong bullish wave because of the oversold conditions and the current bearishness and nervousness in the market, which lends itself to violent waves. But since the market is clearly trending down and the market is below the TA, one has to be careful with being long. I personally took the plunge at the end of the day betting on the bullish wave, so we'll see if I can catch a favorable wave this time.. last two times I missed two big waves (both long and short) by a hair so maybe this third time is the charm. I think the what Germany decides on the bailouts and what comes out of the Fed will drive the markets next week.
Have a good weekend!
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