Okay, first off I need to apologize for the lack of content. Truth be told, I've been spending most of my 'free' time on my automated trading system. With that said, look for a couple of posts a week to keep the big picture in perspective.
Last week gave us our first decent drop in a LONG time. In fact, we haven't had a weekly reversal signal since 8/13/2010. That one led to about a 90 point drop over 3 weeks. Nothing too exciting. The time before that was 6/25/2010, which led to a 125 pt drop over two weeks. That was quick and short lived...
Our last drop of any bear value was the flash crash that started on 4/30 and lasted 4 weeks after a drop of nearly 180 pts. So as this correction unfolds, we will keep an eye on those numbers.
From a technical perspective the 1200-1220 area is very important for the bulls. Should we get more than a couple of weeks of selling and 125 pts (which puts us in the range), then the bulls are in trouble. Look for a ton of buying to come in that area to end our correction (should it be that) or our wave 1 (should primary wave 3 have started).
The short term count down can be counted a couple of different ways depending on how you count the end of the previous wave. I lean slightly towards the wave 2/b flat pattern, but I wouldn't be surprised either way. The short line for this week is follow through so that we have another couple of red candles before March opex week.
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