Short Term Trading Member Forum

[techcharter]

SPY / SPX 5 Day Low Tomorrow Morning.

The bounce off this morning lows looks corrective (Zigzag)

I think the low will be followed by a rally to 1406 area which is 50% of October '07 to March '08 decline. This would be Wave 2 or Wave 2a. I prefer Wave 2a since the 1 month rally off March '08 has not taken enough time to correct the 5 month decline. More time would lull more investors into a false sense of security.

Fundamentally, things are starting to get worse again. Some banks have re-offered 12 month CDs with rates higher than the FED. That may be enough to keep things going for Wave 2c to complete in June '08. I'm looking for Wave 2c to be accompanied by a headline of "normal profit taking" as the excuse for the selling.