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Strategies & Market Trends : John Pitera's Market Laboratory
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From: nspolar2/4/2008 1:40:47 PM
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The banking sector and C, some EW updates.

We dabbled in a few March calls at the C lows but have already dumped em. It is not yet time to make any big commitments in the financial sector.

The BKX may have hit a 3 of C of 2 bottom, but for C it is uncertain. It appears to be lagging. What appears to be following in the BKX is the 4 of C with the 5th wave down yet to come. This is usually a messy and unpredictable area.

The fundamentals seem to indicate there is more shoring up that needs to be done as well. But we believe The Fed will take care of it. They have given every signal they mean business. The 5th wave could be a water torture type of wave, and be fairly long in time.

All this infers a ways to go before this correction is over.



SKF and DJUSFN is very interesting here. SKF is 2X inverse DJUSFN. These 2X ETF's elicit some interesting signals from time to time. We are not sure, but one possibility is for SKF to put in a big pivot bottom in the 92 area , launch to complete a 3rd wave, with a 5th wave yet to come. SKF is one volatile play. The last monthly stick on the DJUSFN left a really long tail, which does not jive with any sort of bottom.

The lows in SKF may be marking the formation of a parabolic pattern, that will complete in another 4 months or so. The top for that pattern should be quite a bit higher than the last one.

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