I keep telling you guys we are setting us up for a 5% down move...25%+ on financials...Can FOMC be the catalyst? Everything is priced in this market on the upside now. If Bald Ben doesn't say something GREAT tomorrow. The markets are going to sell off hard especially financials...The VIX is going to touch 50...Be ready for a 250+ down day . Followed yet by another ass raping 200+ day...I'm expecting S&P to touch $72 NYSE 6900...
Chart 1. A bullish view. It assumes that 3 significant waves down have fulfilled their minimal requirements and big wave 2 (in a circle) has started. This view will be confirmed if the price will cross the 800 area and penetrate the territory of wave 1 (purple). In the same area we have the cross-over of two significant “trend parallels” P1 and P2 (the method of tracing them is available upon request). Thus this area might also act as an attractant or magnet, but does not have to be reached tomorrrow.
Chart 2. A bearish view. We are in wave 4 (purple) up which will hit a tree at the magnet and reverse to complete waves 5, (5) and big 1(in circle) in the calculated 600-620 area.
In the world of the Qs: The waves look slightly different since wave (4) was completed only on 02/09/09, after an extended “flat” and an ascending wedge that went through the a -> e motion. On bullish chart 1 and bearish chart 2, notations follow the general pattern used for SPX. Also, note that the bull will have to say that we had a “truncated fifth” - allowed by Elliott theorists.
There is a strong resistance at 29.65, given by two criteria: 1. The projection of the centre line of the extended zigzag, which is also the “fractal filter” of that move. 2. The bottom of wave 1(purple). If that resistance will be penetrated, the bull will be proven right. Right now this area is very close and could be an equivalent of the magnet discussed for SPX.
On the down side all significant waves could take us to the 24.6 aria. Beginning of April would be a good time for it, when we have a trough of the 18 weeks cycle.
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