Short Term Trading Member Forum

[techcharter]

SPX E-wave 3-3-3 extensions

The rally out of last Thursday's lows looked corrective, and very short lived. There was much enthusiasm. I favor this rally as a smaller degree wave 2 based on the following characteristics:

1.) It was a very sharp bounce which took very little time.
2.) No big open chart gaps have appeared.
3.) There have been no techincal difficulties handling the volume of trades.
4.) The market has not been shut down. like Russia.
5.) The is a waterfall crash.
6.) People in work have started wondering what to do. At the end of Wave 3 is when most actually take action.
7.) In bear markets stocks sell even on good news. There are still rallies happening on good news such as modification of the bailout plan and AIG proposal today. Iy's still early in the large Wave 3 sequence.

Even if I am wrong about this being a wave 2. there is still e-wave support for more downside. The selloff from Monday this week into today's lows looked impulsive. The rally out of today's lows looks like a zigzag so far.