Thursday, December 17, 2009

More top Forming or is it in?

After the drop this morning, the majority of the day was spent tracing out an inverted head and shoulders pattern. If this was wave 1 down, then the wave 2 retrace(62%) should take us to about 111.36. Now take a look at the inverted HS pattern. It has a target of 111.38.
The above chart shows the 61.8% retrace level at 111.36 and illustrates a possible wave 1 and 2 count.
The VIX has room to move down, while it moved up to the upper trendline today, it did not pierce it.

In conclusion, I am looking for a bounce up tomorrow followed by the start of a wave 3 of 3 down. But thats just one interpretation. Kenny has this down day has a wave 2 or 4 down. Followed by a wave 3 up. This has me rather torn as I know the period around Christmas is usually bullish and choppy as trading will be light.
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