Today's action helps but does not yet confirm the bearish case. We will likely know if the high is in by 8:30am tomorrow after the GDP report. I seriously doubt if AMZN's positive earnings will be enough to pull the market back up tomorrow. And even if the GDP report is not as bad as expected, any pop is likely to fizzle, so caution is still advised. However, a weak close tomorrow on higher volume will go a long way to confirming that 1/28/09 was the swing and wave E high. For confirmation I will be looking for either a continuation of today's decline followed by a minimum two day pullback to setup a sell pivot or a break of the 1/20 to 1/23 lows to get 100% short.
Gold, the metal, continued its rally today and I am looking for the rally to continue as long as the US Dollar continues to correct the advance from the December low with a target around 930. However, based on the cycles I do not expect gold's rally to last much more than another week. I will be looking to exit my long gold position at the target or the day after a positive large range day.
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