Give or Take…

Berk here:

A few things to consider in the face of this ugly mess.  1) Fed day… this could just be the beginning.  2)  Fed is notorious for calling tops (even little bity ones).  3) Have you seen the $VIX?

Here’s the $INDU count.  I believe that it will tell us most quickly what is going on.  Since it is difficult to count it as much more than a I-II, i-ii, I think that however it breaks will be telling.

$INDU count

The other option is that we are pushing up in “A” of {{ii}} or that this will be a five wave move in “C” of {ii}.  This could end up being the proper count if the Fed gets a nice reaction.

$VIX is cruising at the mid-20’s today…  Ouch.  But then again.  Today or tomorrow should be the best chance you will get to buy OTM options in the next several weeks.  Price action might make it back to where we are now, but the $VIX will not be this low for several months.

Could be done. Probably more to go...

What I don’t like is an unclear count in the $INDU, and a count that most likely points higher in $NDX.  It’s not looking good for the bearish account here.  I think the rally will be short lived.  And it is possible that the $NDX could head lower first, while the $SPX and $INDU rally off a touch, but that is highly unlikely.

I guess it is watch the clock time until uncle Benny breaks wind…

11:45am Update:  Berk still here:

Little reminder...

The reason I recommend buying your puts now or soon rather than completely waiting on price action is this boy.  Trust me on this:  A few well placed OTM Apr ’10 puts wills have enormous gains.  I reasonably expect the $VIX to be trading in the 90 to 120 range (vs. the 70-90 range of the last decline) in fairly short order.  This is why Mole and I are proponents of buying a little early.  You don’t want to be paying for options with a $VIX at 40 (or higher).  I joked with Mole the other day that with the $VIX at 20 I was about to recommend buying any option you could get for $0.05, as it was sure to double.  Honestly, I don’t think I was that far off.

Anyway, lunchtime is approaching.

BTW: THANK YOU ALL.  This is some of the most intelligent conversation I have seen in here for some time.  Keep up the good work all…