Not So Fast!

10:45am EDT: I had to catch up on some sleep and totally snored through the morning open. Frankly, I wasn’t very surprised to see the pop higher due to the reasons I pointed out in last night’s post.

Where do we go from here? Well, this thing can keep extending for a while before it tops – or we topped and go sideways from here…

OR we might have ourselves a rarity here – it would be almost a delicatessen among Elliotticians. What I’m referring to is called an expanding ending diagonal (psalm 39:1-19 in our bible) and if that’s what we are painting I venture to prognosticate that we’ll see 1017 – 1020 as its top (and the top of A). Here are Prechter’s musing regarding ending diagonals:

A rising ending diagonal is usually followed by a sharp decline retracing at least back to the level where it began and typically much further….

Fifth wave extensions, truncated fifths and ending diagonals imply the same thing: dramatic reversal ahead. At some turning points, two of these phenomena have occurred together at different degrees, compounding the violence of the next move in the opposite direction.

Thank you Mr. Prechter – that sounds pretty promising to me. So, once/if we reach those lofty heights we bears yet again will have to dig deep and risk some of our hard earned assets on a new round of puts.

Someone actually managed to smuggle a video camera into my early afternoon L.A. skank gym class. Warning – hide your children and send your spouse shopping before pressing the play button – we work up quite a sweat in there.

P.S.: Boy am I glad I hedged myself before the close yesterday…

10:55pm EDT: Lovely Keirsten points out that we are very close to the 38.2% fib line as measured from the October 2007 top to the March 2008 bottom:

Great eye, girl! BTW, that would be around 1011 on the ES futures. I think we could breach it by a few handles as part of a scare tactic over throw, but it’s probably safe to take profits there if you happen to be long.

11:02am EDT: Meanwhile in the murky depths of the currency markets…

The ole’ buck has actually been hanging on – while equities are pushing higher.

Gotta go… have some puts to buy…

11:44am EDT: Loaded up on some SPY and Cubes puts – got August because we got a few POMO auctions scheduled for next week – so if she drops she better hurry and make a move by EOD Monday.