Monday, May 24, 2010

Bulls are still playing defense...

The globex session had the market down, but the bulls were able to salvage the open and race to retest Friday's high. After a few failed attempts of trying to get past 1090, the Bears took over and pushed the stocks over the edge late in the day.

Here are my observations:
- We had our RSI(5) extreme oversold condition at the end of Minute wave 1, and we have yet to exceed that level. Since I fully expect to exceed that leve during Minute wave 3, then we have either:
- not hit the 3rd of 3rd (subminuette wave 3)
- the big one will come during the 5th of 3 (minuette wave 5)
- We are either in a minuette wave 4 triangle and will continue to bounce back and forth tomorrow and Wednesday or we are hitting subminuette wave 3 tomorrow and should see Friday's low removed in the morning.
- We have plenty of room left on the weekly RSI before we hit a significant oversold condition and even more for divergence to form
- I'm looking for a minute wave 3 low around spx 930.

Best of luck!
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