If the banks come out one a day with their subprime problems, we could see the market declines to no end. However, technically speaking many indicators point to a rebound Monday. The H&S should be considered finally complete. The sell off by the close was obvious that no one wanted to keep a position over the weekend. Since oil stocks are also retreating, the rebound will be anaemic. Right now it is not hopeful that it will go any further than 692. It has to close above 679 though.
2c
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3 comments:
If you believe the EW, the wave 3 is the longest, and it could go a lot longer. wave 4 cannot go into wave 1., and wave 4 cannot get above 696. My experience with EW is that they only work when they work.
Today is interesting, XLF is not down much, and BKX, XBD are all green. we should get some bounce here. I double my OEX call this morning, see how it will do next week.
p
very true, wave 3 is the longest, the reason I said 692 for it is the R2 area for Monday, it should stall at 685 r1 let alone r2. I will add OEX calls on Monday provided there is no gap down again. But it has to be 680 calls. One of the other thing I look at is the lows are leveling out. Others are when VXO and Price action at extremes with peaking selling sentiment, it has to rebound. (unless of course another bank come forward with subprime problems). OIH is on downturn but with its volatility, it can reverse on the flip of a coin. Also this entire down leg from Oct15 is 0.6 retrace of the upleg from Aug low. Not that it can't go 0.78 but this is the chance one has to take.
2c
I think we are in the strong fast down trend, and I still see we are lower at the end of next week from here. I will exit my call on any reasonable bounce. the reason I believe there will be a bounce is that next week is the "happy hour" scam used to call. But I wouldn't expect the bounce will last longer than 4 days. More like 1-2 days bounce. I feel foolish to go long Thurs. even I knew we should whack the bounce. Now obviously it hurts.
p
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