Another huge sell off... unbelievable! I was wrong again, as support at 1115 broke and down we went! I hope all of you that were short... stayed short, and didn't get out as I posted yesterday. I guess I've been so conditioned to expect a rally to occur after any big down, that I simply couldn't believe that it would continue selling again today.
It's taken the PPT almost a year now to condition all the bears to close out their short positions after only one day of selling, as we have always had them come back in and squeeze the bears... killing any serious sell off from starting. I have to change my thinking now, and expect any rally to be short lived, and the selling to continue down.
OK, of course this changes my forecast, and I'll go into detail on the weekend post. But for now, I'd expect an 60-70% chance of a bounce on Monday and maybe Tuesday, and then more selling until we hit the master level at 1080 spx. At that point, I'd say will have a 90% chance of a 2-5 day bounce. It could just go down Monday and tag the level, and then reverse to start the 2-5 day bounce? But, I think it will wait until Tuesday or Wednesday... then dump to 1080.
I just think that people will calm down over the weekend and allow the market to float higher on Monday, and maybe Tuesday. Then more selling to 1080, at which point I will probably go long for the bounce. I expect that it might pierce the 1080 level intraday and trap a lot of bears short... thinking that it broke the major support level, only for it to be rallied back up the next day (or later that day) in a big short squeeze.
But, after the rally is over... more selling is coming! It will be a Wave 3 Down... and you know what that means! Panic Selling! I held my short over the weekend and will wait for the 1080 level to be hit before I get out. I'll probably go long, but I'm not sure? Yes, there is a 90% chance of a 2-5 day bounce... but too be quite frank with you, I might be too scared to chance it? We'll see...
Red
Sorry to be so sad but I cant wait for the weekend post!
Looks like Support for Bernanke gaining votes now – May get a decent rally monday
Looks like Support for Bernanke gaining votes now – May get a decent rally monday