predict for monday

Seems bears capitulated some into the close. That's likely a scenario for a retest of futures high on cash on monday. But my guess is you want to short that as that will likely mark bear capitulation to clean the pipes for a retest of lows every bear has been drooling over for last 2 days while 6' long ram rod was shoved up their rear. Retail will likely finally load up on monday morning when the reactor is found safe. That is the only thing that makes sense to me right now. From EW, I think monday will finish off wave 4 for wave 5 down. Then a wave 2 up will result swinging to 1300 or 1320.

In the unlikely event that 1300 gap closes, this sell off is over, however ugly this market looks, it won't turn before new highs. This has about 30-35% chance right now, the overwhelming evidence suggests a retest or lower low before the bears are going to get the 12' rod next...

Well looking at the data, I was thinking wave 2 was complex, but I think it isn't. Therefore wave 4 would be complex. What I think will screw over everyone is if gap up monday, sell off into tuesday BUT do not make lower lows.. finds support somewhere. Then we finish off wave 4 with a rally to 1300-1310 area into end of next week. Then the following week we sell off to new lows 1220... Then wave 2 up begins.

"In the unlikely event that 1300 gap closes, this sell off is over" Price isn't what makes a bottom. There isn't one there.

"In the unlikely event that 1300 gap closes, this sell off is over"

Price isn't what makes a bottom. There isn't one there.

IF they can keep the rest of the 3000 active stocks where they are right now and rally the remaining 100 large caps above 1300, they can take the index to the new highs and you can do nothing about it because it happened before!

I am not saying you are wrong, I am telling you that we are still building a long term top and the last rally to come will be out of nowhere and the ugliest of all, so it is very much among the possibilities... Jmho...

This almost reminds me of Livermore's notes about the San Francisco earthquake... I trade the prices among anything... Best.

Edited by arbman, 18 March 2011 - 06:21 PM.

Arb-Don't get me wrong, I'm not saying the long rerm top is in. In fact, I agree with you that it is not. I'm merely saying that the bottom of this correction is not in, and that the correction is not over. I have two scenarios here, and after Monday, I'll be quite sure how to proceed. Monday is a bit pivotal for me, but only in the shape of the correction-there is no divergence on the bottom-so I can not see it done. Volume indicates likewise.

I am just being alert about anything really unusual with this sell off and ugly rally so far. Now, the market really took a tsunami and a radioactive leak this week and managed to somehow absorb it. The initial sell off really felt like the flash crash, total wash out. Then the central banks jumped in, just like the trillion dollar program after the flash crash. We have some smoothing factors like the POMOs still being pumped in, so they are really on monetary hyper drive again. So, yes the natural course of the prices would be another, but less violent low to follow in the second half of March and then a pick up in the up trend into April at some point... I am looking at the weekly charts and the moving averages are barely turning there, it is very rare that the market really enters into the bear territory like that, but then again, this is exactly how the flast crash dropped about 200 points from the top... So in duration this is similar to Nov 2010 so far, in intensity somewhat about Feb 2010, and in character about May 2010. This is an important cycle low in my work (40 and 60 wk harmonics)...

Thanks Arbman. I actually was wondering what you were seeing.

I agree with you arbman, there's too much awareness by central bankers for the top to have been seen. Internals completely washed out. Sentiment hasn't however. But give it a few days and I think it may.