Tuesday, February 23, 2010

It Showed Up

Wave (C) down appears to have showed up this morning. The pattern is pretty clear. The immediate selloff looks like a small degree 3rd wave in the Qs which actually topped on Friday 2/19. Coming under 43.51 will pretty much confirm that the trend is down as it would overlap wave [b] of B up and confirm that the recent rally is not an impulse.

The duration of wave (B) means that we are likely to see the entire correction drag out into March unless we see a climatic selloff that retests the February low by this Friday. Otherwise, this week's selloff will probably be wave 1 of (C) with wave 2 up to follow next week in keeping with the typical first of the month seasonals. This would put the end of wave (C) into the latter part of March.

That really seems like a long time right now, but at least now we have some targets to work with. The Qs should bottom around 40.53 for a measured move with equal legs. If wave (C) is 1.618 x wave (A), then the target is 37.73. We can better judge which target is likely once wave 1 of (C) is over.

I continue short with the Qs as well as FWLT, JOYG, NVDA, AAPL, AMZN, SLV, GDX and am prepared to exit at any time. These are short term trades for targeted gains less than 10%. I was stopped out of PCLN before earnings. I sold STX for +8% on Friday and remain long various intermediate and long-term positions including OIL.

No comments: