The market's off 16.60 at 1341.05. I think this is the "Y" from Daneric's W-X-Y count and a result of the bearish Gartley pattern we saw conclude yesterday.
http://danericselliottwaves.blogspot.com/2011/05/elliott-wave-update-10-may-2011.html
While SPX could easily continue down, I'd be watching for a bounce at:
(a) 1333 -- the long term trendline from the Oct '07 high (stopped the last decline cold); or,
(b) 1329.17 -- the previous low, and support from the trendline beginning 4/18.
If we can clear those levels, I've got my fork ready. Otherwise, I'm thinking one more frenzied, pull-out-all-the-stops push to 1370-1390 before P[3]'s finally here.
We got our bounce a few points north of expectations at 1336. Once again, that Oct '07 trendline held. Putting on a short-term trade here -- bought a few May 137 SPY calls at .22 for the 30-40 point rebound I'm expecting over the remainder of the week.
ReplyDeleteI have every expectation that the gov't will gin up some pretty numbers for initial claims and PPI in the morning and all will be wonderful in the world again.
Closed the above position at the close for a quick 10% gain because:
ReplyDelete(1) the lack of momentum in last hour
(2) the bearish engulfing candle on eminis dailies
(3) I'm a spineless wimp.
I suspect lots of folks are waiting to see how tomorrow's shapes up before committing. I'll be one of them.