Donald,
Yesterday's drop had the smell of a 3 wave- A continuous drive forward, unlike the 1 which smells of hasitation and the 5 which is sharp and brief.
>>If I'm right, the following scenario is a possible ST outlook-
Today the OEX (currently at 512.9) should not exceed 516.5, and close flat to slightly up. Tomorrow the market will be down 1% before the announcement, try to rally just before the announcement, and start dropping fast a few minutes after the announcement (unless it's a 0.5% cut, which is not likely). On Wednesday we should check the line at 492 OEX, and break it on the same day or the next morning.
So far, so good.
IMO we will break the trendline this morning, and spend most of the day trying to recover. Could get as high as OEX 495, but no guarantee.
This 1 of 1 of 3 duration looks like a day and a half, so half a day of correction is enough.
Today looks like gap down, and not much weakening afterwards, then a 3-4 hrs. attempt of recovery, then a sell off in the last 1 1/2 hrs. that would start the 3 of 1 of 3 into Monday morning.
My recommendation for the nimble traders is to close their shorts in the morning, around OEX 485, and reopen and even increase in the afternoon, around 491-4.
Position traders should open a short today at the rebound (12:45 to 14:30), and increase when the market starts down again.
ATG |
