Pop Quiz

Just in case Berk and I haven’t freaked you bears out enough today – here’s my pop quiz of the day:

Free mud lollipop for anyone who solves this ‘puzzle’

Maybe this time we drop further and admittedly this is an intra-day reading – might change before the close. But if we don’t bust higher here before the EOD I would suggest extreme caution. So, now we’re living in a topsy turfy world – down is bullish and up is bearish!

The moral of the story is: Sometimes it takes a little snap back to extend the life of a drop.

So, why am I expecting a little correction here? First up this first push up looks textbook motive – if I zoom in I count nine waves. Which in EWT equates to a motive wave – and this one is a beauty.

Second clue is the fact that we have stopped right at a high frequency short retracement level. So I’d consider this a great opportunity to take profits in your FX positions – I just scaled out of my EUR/USD puts which I have held way too long. Again, the DXY odds calculator is brought to you courtesy of 2sweeties over at retracementlevels.com, whose excellent statistical wares I’m happy pimping

2:23pm EDT: ALERT: If we don’t hold 1044 on the ES we’ll most likely push towards 1035. If you are a Zero sub – check out those two converging support lines.

2:54pm EDT: Thus far we are holding the line – barely. Will it hold or are we heading to 1035 in an orderly fashion. Tough to read the tea leafs right now but this is what I DO know: Right now everyone seems to assume that the world is ending and that we are  heading straight down. And remember the old mantra:

What everyone knows is usually not worth knowing.

As much as I’d love to a plunge just to stick it to the bulltards we are now at levels where some intrepid bulls might be tempted to make a stand. Sometimes I’m wrong with my paranoia and sometimes I’m right – but the few times I’m right at least I’m not getting vega raped. So, I leave it up to you guys – if this is Primary {3} then it’s in its very early stages and I expect there to be some pushback either here or at slightly lower levels. There are some big cats with deep pockets out there who’ll find 1044 and especially 1035 mighty tasty.

Generally however the current wave pattern does look promising, so much as  matter of fact that I will be tempted to start loading up on puts on at 1070, 1080, 1090, and beyond should we push higher. Really don’t care if we scrape 1120 – what I was looking for was exhaustion and I think we are seeing the first signs of that.

This entry was posted on Wednesday, October 28th, 2009 at 1:59 pm and is filed under Reversals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.