Tuesday, May 4, 2010

The bulls select door #2 and the market crashes...

The futures made it pretty simple for us as Monday's low was broken in the first 5 min of trading. That move eliminated a triangle and put the bearish option at the front of the line. Shortly after, goldend support at 1183 fell, and we now have a confirmed weekly reversal with the touch (actually was a bit more than a touch) of 1173.

Looking at hourly chart, we have not hit an oversold condition yet that is equivalent to a 3rd of 3rd wave, so I'm expecting further selling that will push the index somewhere in the neighborhood of the weekly support line of 1150 tomorrow for our 3rd of 3rd.

The 15 min chart shows we could have a little more bounce tomorrow morning before more selling should kick in. A close above 1183 would not be good for the bears and even if we get continued selling would put us more in a zigzag pattern than impulsive.
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