More Wave 3 to come…

Today felt like a blur to me, I don’t know about you.  To start off with, Jim Cramer jumped on the tube today to warn everyone that their investments could lose 20%.  Another 20%!!  What about the first 30%?  Nobody seemed to see that coming.  If only we could have profited on the way down…Oh wait.

Anyway, Cramer issuing a sell-signal is a short term buy signal for us.  Unfortunately, the rally is at LEAST half over.  Good news though, is the rally should be about half over, so a little more pain, and a chance to get loaded again, and we should be off to lower levels.  We could rally for a couple of days, but I can’t see the $COMPQ getting much past the open gap at 1950.  Ya, that’s about 90 points off, but if the rally DOES last more than 1 day, that’s the max I would expect.

We have been stressing a weekly timeframe (of sorts) to help eliminate the intra-day noise.  IF you can day-trade and are comfortable doing it on those timeframes, great, this is the market for you.  But if not, KNOW that the current trend is down, we expect for at least another 2 weeks for a couple of reasons.  Of the 135 weeks of the Tech Bubble (Wave A down), 83 of them finished lower.  27 out of 49 weeks, including corrective waves, have finished lower so far in the Financial Bubble (Wave C down).  61.5% (thanks Leonardo) of the weeks in Wave A closed down, IF we get 135 weeks for Wave C, we should expect more along the lines of 75%-80% of weekly declines, looking at LEAST 100 weeks of decline, so we are “roughly” a quarter of the way done using this estimate.  I was looking at the $COMPQ for this, which we are targeting 1471-1400 for a target, and monitoring our level around 1852 and 1950 for current resistances.

Not much else to say…$VIX was up, markets were down, TNX was down, 90% of stocks were down (EVEN after a FOUR-Hundred point rally.  The $INDU closed beneath 10K for the first time since the 26th of this month 4 years ago, volume across the board was 11x more to the downside than upside (on closing issues).

That going to be it for tonight folks.  Rumors of manipulation are spreading at almost all times.  It could be just to deter people like us, speculating on the dark side of the market, or it could be truth.  I maintain that you should use rallies to position yourself for more downside, and manage your risk like a hawk.  But don’t be afraid to nibble.  Shit, throw some of YOUR stuff out there.  Let us see what you got…

Skål!