(to watch one youtube: http://www.youtube.com/watch?v=MidBWdQRGJA)
Wow! What an ugly sell off on Friday... so what's next?
[pro-player width='425' height='344' type='video']http://www.youtube.com/watch?v=hS2HfjR9oPM&feature=player_embedded[/pro-player]
(to watch on youtube: http://www.youtube.com/watch?v=hS2HfjR9oPM&feature=player_embedded)
The answer... One Ugly Week! While I still think Monday will be an UP day, the overall week should be down hard. I know that seems strange to say, but after such a large move down there is usually a bounce... even if it's only a small bounce. Think like a gangsters, and you'll figure out that most amateurs went short into the weekend, thinking a crash is coming on Monday.
So what would you do to steal there money? I'd gap it up on Monday and create a short squeeze... but I'm not saying that's what is going to happen, as I really don't know (I give that about a 1% chance of happening)? The market could fool everyone and gap down and crash as Atilla seems to think. He could be correct on this, as that would fool the amateur bulls.
(to watch on youtube: http://www.youtube.com/watch?v=xmxLaYUWVc8)
So what are there in the market... more amateur bulls or bears? I don't know? Cobra gives Monday a 81% chance of closing up from past statistics when the Vix rises more then 18% in one day. Will this time be different? It seems too me that the first sell off (wave 1 down) is usually retraced very heavily to squeeze out the bears, before the real multiday move down happens (wave 3).
The question isn't whether or not this is a wave 1 down, as that's obvious. The question is where it ends? Did it end on Friday, with Monday and possibly Tuesday having the wave 2 up retracement wave to follow? Looking back at other similar periods there was an up period everytime at some point in the following week, before that week close out down hard.
I'm thinking that Monday will be up just a little bit, (maybe a spinning top, or "pause" day), and then a squeeze up on Tuesday... followed by the rest of the week selling off hard. How far up, I don't know? I'll be looking for upside FP's, but right now I don't have any.
Make no mistake about this forecast, I DO expect this coming week to be down hard... but it shouldn't be straight down yet. That shouldn't happen until we are in a wave 3 of 3 of 3, etc... which isn't here yet, and might not be here for several months.
Now, there still is the possibility that TPTB cause something to happen before Monday which would just cause a gap down and crash on Monday. Anything is possible here, but the past statistics say they we will go up on Monday and/or Tuesday before moving back down into wave 3 (which could easily hit that 1150-1200 range that Atilla mentioned).
These riots in the middle east are growing, and could spark the "crash" that TPTB have been planning, while us sheep try to predict the date. We could very well open on Monday and drop like a rock! I can't answer that? I can only look at past history, and state that it's more likely to bounce back up with a wave 2 first.
If I allow myself to get caught up in this news, I'll likely be one of the bears trapped during a squeeze. I've did that before in the past, and I always got burnt. They want to distract you with the news, so you will get long or short when they want you too. Right now, I think there are a lot of new retail shorts in the market from Friday's sell off, which was simply panic from the "unknown" situation in the news.
There "will be" a "news event" or false flag that will cause the crash... this middle eastern crisis could very well be it? I don't know "what" it is, only that something will cause the crash. TPTB have that already planned out, and I'm sure they have their evil little minions helping to fuel the riots over there.
So, I really don't know what is going to happen on Monday, but if things play out like they did in the past, then Monday and possibly Tuesday will be UP days. If the past does work, the we can safely say that "this time it's different" and actually be right for once. So for now, I'll wait for a bounce to get back short again... and hope I get the chance?
For those already short, I'd just sit tight a wait out any bounce (if we get one?) as by the end of the week the market should be a whole lot lower.
Good luck everyone...
P.S. Thanks go out to Richie and Andy who made a donation to "Feed the Dragon"! For the other 998 to 1998 people (the blog average 1,000 to 2,000 readers per day), if you make a nice profit this week on the coming crash, and this blog helped guide you... (you'll figure it out) 🙂