Tuesday, February 9, 2010

3rd of 3rd coming?

Well the bulls proved they had more in them than just yesterday. They have now, however, put in as much upside as they should have. All the indicators and the patterns are lined up for a 3rd of 3rd beginning tomorrow. But just because everything is lined up doesn't mean it will be so.

For my 3rd of 3rd scenario, I'm expecting an acceleration gap down tomorrow morning and quick take out of the prior low pivots: 1061 and 1056. From there, 1044 should fall easily and the market should collapse for several days. I am following my game plan from here with both Feb and March options along with an ES position. My wave 3 target is sub 1000.

Should I be wrong and the market put in a higher high tomorrow, then the whole pattern will have to be re-evaluated.
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