Friday night special!

We came with in 0.15 points of the 61.8% retrace of minute [i]. That point looks to me like the end of Minute[ii]. The rest of the day traced out various wedges on extremely light volume, but never exceeded that high. The impulsive drop after the peak looked like it could be the first 1 of 1 of minute [iii].
The dailies have drawn out a classic bear flag, with decreasing volume. This signals a strong impending drop.

BPSPX is screaming sell still (above 70 with a 6 point drop is a strong sell signal). BPSPX:CPC actually headed down today as the market was heading up. This is yet another negative divergence pointing to a strong move down next week.
My last entry focused on the fact that the VIX had not made it to the midline of the BB channel. Today it has, and with that mark made I believe it will start spiking up again.

In conclusion, everything points to a down Monday. As of tonight we only had 5 banks fail today. 10.2% unemployment and we rally? Consumer credit is shrinking at a dramatic rate and we rally? Next week is going to scare the pants off of anyone that is a bull.

Feel free to comment...slow weekend so I will be around :)

Minute 3 or not?

We finished at the highs of the day and right at the 50% retrace of minute [i]. Now the burning question is: has Minute[iii] down started? Well its hard to tell, we ended the day with a bearish rising wedge, we are at a 50% retrace, BPSPX is screaming sell and we have the employment situation tomorrow. But then again the VIX has not retraced back down to the 20MA.
See...screaming Sell :)
Vix needs a little more...maybe? We could easily fake out (spike up) out of the bearish wedge tomorrow, before collapsing.

In conclusion, we are close enough. I think its safe to go fairly short in the morning. If we spike up, all the better with cheaper entry point. If we gap down, then [iii] has definitely started and it has a long way to go.

Its more clear...

Well...its best to keep your eye on the target and not let the intraday moves whip you around. Did I mention that [ii] was going to be choppy? :-P
Looking at 104.3 as a potential low point for B (62% retrace of A) and then up to C at 107.55. If A=3.25 then C=104.3+3.25=107.55...funny how the numbers work out. So I am looking at hitting that target some time tomorrow or Friday. The trendlines point to the peak occurring late Friday.
Looking for a bounce on the VIX off the 20MA.
CPCI:CPCE MA's finally look like they are on a collision course again.

In conclusion, wave 2's are choppy and whippy. Keep your eye on the target (50%-62%) retrace. The numbers on this are working out to a 62% retrace, so I would take a small position at the 50 and layer in a larger amount at the 62.

Choppiness Galore!

In the chart I have C located at the 62% retrace. Be aware that the 50% retace is sufficient. If A gaps up to around 105 and then falls to B at about 103.6, then A is about 1.92, so if C = 1.62A then C=3.11.
This would put C ending at (103.6+3.11) = 106.71. The 50% retrace is at 106.7.
The VIX needs to pull back into the band. Preferably bouncing off the center of the BB.

In conclusion, I am looking at a possible gap and crap tomorrow followed by a strong move up to 106.7 over the next day or two afterwards. The 106.7 neighborhood is where I will sell my calls and buy puts.

[i] may not be over.

Looks like [i] may not be over. (v) looks like and ending diagonal to me (bullish falling wedge). My primary count is that we make a marginal new low tomorrow and then we start on our trip to the 107.55 area. Or we just start on our trip to [ii] directly. Either way I expect tomorrow will end positive.

Remember in the comments from yesterday that this week was going to be choppy...and not fun :-P Shorts and longs were both hating it at various points through out the day.

In general the wave 2 of a degree retraces back to the area of the wave 4 of the previous degree. In this case, this occurs around the 50% retrace. I would start getting short there. But I do expect it to push higher as some shorts get squeezed and some bulls don't want to be left behind.

I have long positions and will probably enter an order tonight to pick up a few more at the open if we gap down.