Tuesday, November 22, 2011

Holiday Rally Set Up?

Not much to add today as the market didn't do much in thin trading. However, this sideways move resembles a W4 of a W5 so I am going to assume it is going set itself up for a final sub-wave down to perhaps 1157 to finalize the correction and start a rally from there. If you look at the black markers on the chart, these are the Fib retracement levels I first started posting over a month ago. Notice how the first drop stopped at the 38% level and how the 50% has held, should another bearish wave come tomorrow it could probably hit the 1157 level or 62% and rebound from there. Also, my goal is to go margin long on trade above the 50 day ma but if we get a sell off early morning to the 62% level it will be very tempting to buy at that spot.

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