Thanks option,I'm going to take some profits tomorrow,Time to take a deep breath and ring the register and see where this market is going. 100 more points and we are in an official crash,We are only 100 points from an official stock market crash from October 11th, 2007, a 15 percent decline over a few months. The small cap Russell 200 index is down 20 percent over the past few months, already a crash.
Here is a good analysis of what will happen over the next few weeks imo.
There is a really good chance the decline from December 11th will end no later than Friday, perhaps tomorrow, right around our next scheduled phi mate turn date. The coming rally is likely a wave 2 bounce, which will last a few weeks, and set up perhaps the worst fall of this six month Bear market, the worst decline in six years. We have identified a Bullish Descending Wedge pattern, which is a termination pattern, for wave {5} of 1 down, and it looks to only need another 100 to 150 point decline to finish. We could see that over the next day or two, which would place wave 1's bottom within a day or so of our January 18th +/- phi mate turn date, which is essentially any time now. With a small change in the McClellan Oscillator Wednesday, that could mean one more strong decline over the next few days, one that could possibly be reversed intraday, so be nimble fellow traders. Thus this next phi mate date would be the bottom for the move from December 11th's wave ii top, a nearly 1,500 point decline. No guarantees, but this is how it looks to us Wednesday evening. The next rally should be tradable, six hundred or more DJIA points.
Still, the VIX continues to bother us. It is calling for a stock market plunge, maybe as bad as a crash, starting over the next month or so. Before that event, the VIX symmetrical triangle is suggesting we should see a rally that takes the VIX to around the 20.00 level, probably a two week +/- affair. That would be where the next huge decline would begin.
