Still falling…

Let me start by saying that I am angry at the market.  Not that this isn’t typical expiry antics, but I have decided to walk away at about 2:30 both yesterday and today.  As it should go, I decided to pass up on the two most directional moves of the day.  Wouldn’t you know it.  “I can’t complain, but sometimes I still do!”

So where are we now?  In the target range in FSLR, MA, and BIDU, and in the free fall zone on GOOG.  Now don’t think I am going all bullish here, ’cause I am not.  I am going to say though that we are getting close to what we expect to be strong resistance levels, not only in these stocks, but in the markets as a whole.

$NDX is quickly approaching the 1K level, which includes the “thrust” target for the triangle (973), so we should expect some buying there.  However, it appears that the bounce/chop expected around 1000 should be a 4th wave (of [5]), meaning we would have one final (sizeable) push lower, before a decent sized rally.  If we cross 1000 without much resistance, I would be targeting 900 and 850 for the $NDX.  We have also close outside the 2.0 BB for 2 days in a row.  Not that we can’t do this for some time, weeks even, but know the rubber band is stretched around our resistance.

Again, being cautious, and I am looking to accumulate some shares in my IRA as we push these lower levels.  And I do expect us to test some of the lower limits (at least so far), as hourly technicals look good.  Weekly MACD histograms is pulling back, marking the we are losing momentum.  I also expect to see some institutions stepping in right here, as soon as the bears think we have broken lower.  There are plenty of nice round numbers around ($SPX 700, $NDX 900 and 1K, $INDU 7K and 6500).  I am just saying this is a wave 5, meaning we SHOULD be nearing a bottom, and some indicators are lining up.  I for one, am treading lightly.

We also have Mr. $VIX bringing in some action.  Today he not only pushed through my 77.50 resistance, but put in a new closing high, increasing the likelihood of the decline.  We should start getting some $VIX buy signals as we push outside the 2.0 BB.  We could get several of these before they actually kick in, but I will be watching them closer now than ever before.

So, what am I saying?  All in all, I think we drop.  I like my target ranges for now, but am expecting them to give way in a final push lower, likely not exceeding 6500-6000 in $INDU and 900-850 in $NDX.  The reason I am “worried” about this bottom is that the subsequent rally should be fairly large, targeting 9K easily.  Though we will deal with upside once we hit a bottom.

UPDATE 10:38am EST: Berk and I just grabbed some Dec and Jan GLD puts. Stochastics look good right here – as low risk as it gets for that crazy metal.

Skål!