Thursday, February 25, 2010

Yikes! Keep us guessing...

Isn't it nice when you do your homework, put up your analysis, and then the market grades your paper and hands you back a nice big F. Well, that is what happened today as the market gapped down below key support, chopped for a while, and then bolted right back up.

So where does that leave us? A few NEW options...

Scenario #1: Minute wave 2 still in progress
- Waves 2&4 have symmetry (1:1.382)
- Wave 5 target is just above the current correction high with a stretch target to 1127-1130 area

Scenario #2: Either a leading diagonal or a 1-2, 1-2 count
- A LD allows the market to fully retrace the 1106 high, but pretty much the market should fully drop tomorrow.
- We backtested the broken trendline at today's highs

I think both bulls and bears are feeling a bit frustrated right now with the constant whipsaw. Just remember that the market is trying to condition us for the whipsaw, and then it will make its move.
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