Sunday, July 5, 2009

Rough week...

This past week has been rough for the market and me! It looks like it is going to continue for the market and lets hope it doesn't continue with me. I will stop posting the BPSPX:SPX and the CPCI:CPCE charts as they have crossed indicating a down market for the intermediate term.

So if 95.5 was the high and now the wave down has started, then if 95.5 was a wave 1 leg down to about 88.85, then wave 3 might be looking at a target of 95.5 - (1.618*(95.5-88.85)) = 84.65.
This is fairly close to the H&S target. Ultimately I am in the camp that says we will retest the March lows.

With such a large VIX spike on Thursday, the potential for a bit of retreat in the VIX is there. So you might be looking at a small bounce up in SPY on Monday, but I expect the ongoing trend to be down.
As the decline continues I will be looking at the following chart to find the low and turning point to go long:
This along with the e-wave count is what I am going to use to pick the turn.