The market looks like it completed 5 waves down in this larger wave 1 from 1150.45 to 1083.11 today. I was looking for a wave 4 up and 5 down, as I posted on my weekend post, and I think we may have gotten it? If Obama doesn't mention anything about Wall Street (as I suspect he doesn't have George W. telling him what to say... if so, look out! A crash is coming! LOL!)... then the market will probably start a "week long"... larger wave 2 move that I'm expecting.
I think that elliottwave, fib's, ta's, and support and resistance levels... work really well when the market is in a trend. I think we are now in a new trend... down of course! That's why I think the forecast I put up last Sunday is tracking as well as it is.
During the last several months, when the market wasn't trending, but instead... stuck in a channel, forecasting was very tough. I don't think I got half of the moves right back then? Maybe it's just blind luck this time? Either way, I'm happy that it's working this time.
So, if all continues as planned, then a slow grind back up to about 112.00 is expected over the next week or so. Of course it will be choppy and great for day traders. But, I like to trade trends, and I think the next one is up for a little while.
If you're playing options, then I wouldn't go straight long as the IV will kill your option price because the VIX is going to drop while the market goes up. The only way to win is to do a spread or buy deep in the money calls. It's still risky of course, but that's what trading is all about.