Saturday, September 26, 2009

The Danger Zone...

Ok now that we seem to be out of that corrective mess(the recent rally). Counts are appearing more clearly. A was 0.84 long, B appears to be over as it has retraced 0.62 of A. Finally if C=A that would put C (and wave (ii)) ending at about 105.27, if C=1.618A then we are looking at the 105.7 region. The last level is fairly close to the 38.2 fib level at 105.6.
Now if it does turn at (ii) then we are looking at (i) which was 3.93 long. If (iii) is 1.618*(i) that would put its length at 6.34. So the target of (iii) would be 105.7-6.34=99.36. Wait, but that area is a support area that is a VERY well defined support/resistance. Its interesting how things line up. Below shows that support/resistance line as the dashed red line.

As we can see that area acted as resistance in late July and then as support in early August and then again as support in early September. Looks like we will be visiting it again soon.

The VIX:SPX closed right on its 50ma. It looks like it will make a trip to the upper BB, which would correspond to the run down for (iii). For now, the close below the 50ma points to a short term retreat in the VIX:SPX and a small rise on the SPX.
And of course I will be waiting for the 20ma to cross the 50ma on the BPSPX:CPC before I full commit.
Now...more Danger zone!


Anonymous said...

do you think it will look like last Quarter into earning?sold off till bank earning then squeese the shorts or watch 1010 980 950 ?
I mean see what the bounces look like ?

Pokerden said...

I think it P3 started, but that 1 of P3 will end before Christmas and we rally in 2 of P3 into Christmas/New years...Then we start 3 of P3. So basically down Oct/Nov rally into Dec.