Today's breakdown from the open puts the markets squarely on course toward the previous downside targets and target dates. Volume so far today has been below average, which points toward a bottom.
The current targets on the Dow are 6451 and 6000 and for the Qs are 25.69 and 24.29. These should be reached by this Friday March 6 to Tuesday March 10. The most likely scenario is for a low followed by a retest around March 17 to 21. I don't plan to hang around short for the retest. Only a move on volume on the Dow below 6000 before March 10 would alter my outlook.
The risk for shorts is an explosive rally coming out of nowhere that wipes out profits in a few hours. The risk for longs is a crash to Dow 5000 and QQQQ 19.72. The latter seems less likely at this point, but not beyond possibility. Nevertheless, prudence would dictate profit taking for shorts in the near term, in my opinion.
Gold looks ready to retest, if not exceed, its recent high. However, it too should turn with a bottom in the stock market so longs should not be too greedy here.
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