final down wave now in progress , this will finish the first wave down of this bear market and should therefore provide a good long entry.
i still hold my eight short positions which i will sell this week , around 1230 spx points in total for the trade and each short is a 100 unit contract which is currently a profit of about $123,000 US dollars.
When the market is so volatile the waves are very clean and balanced, my favoured point will be around 1080 to 1090 and will be a double bottom pattern or may shoot lower to provide divergence on longer frame indicators.
in summary will look to reverse shorts and go long . good luck everyone.
Very impressive - when did you start going short exactly?
Currently short the SP500 also, but not to the same degree as you!
Not looking good for the bulls - tried to go higher this morning but failed. Volume was very weak. Added to my short at EOD.
Man there will be/are some bargains out there though!
The wise words from Dumbass.... be careful as this is the end game for the first leg of the bear.
DOW rose 322 (+2.97%) to 11177
The first leg and "recovery" is the denial stage....This volatile more up than down "recovery" (sucker rally) lasted 4 months back in the last Bear market Cycle stage 1 (denial stage) (end Jan 2008 to May 2008)..."bargain" hunters put counteracting upward pressure back on the index....until the next bad news hits.
The DOW rose on bad news. Apparently this is good now though because it will force QE3... what a joke. Volume was weak again too. That said I covered 1/3.
Charlie Aitkens newsletter today shows 3 charts of Bank Of America ( Holds 25% of all U.S bank deposits;too big too fail,yeahh right) Meryl Lynch and Goldman sachs all falling away badly. combined with death spirals on many European banks we are on "the cusp of another round of bank counterparty risk". Take profits on any lifts methinks.
overnight action seems to confirm a bottom is in on the sp 500.
i would now trade from the long side with extreme caution as the primary trend is still down.
uptrends in a bear market can be sharp and powerfull , i will look at potential targets for this up wave.
for the more technically minded punters some charts confirming eacy other.
firstly the bottoming pattern looks like a cup and handle bottom set up on a truncated fifth wave compromising of and ending diagonal pattern. which basically means the true price bottom was the third wave down and the fifith wave did not set the price low as there was no bear momentum left to set a new low.
next looking for 5 waves up and 3 wave correction to confirm uptrend
and finally a text book bullish pattern called a gartley
and finally a text book bullish pattern called a gartley
not exactly textbook ;+) B point was at 50% not 61.8
as per my post #804 , there is a support zone around 1110-1160 and so congestion may occur here. and on the shorter time frame we've now found support at 1150 itself.
I drew this before last nights trading.
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