Whacky Wednesday

UPDATE 10:47am EDT: Just fell out of bed after a pretty bad night – sorry rats. Anyway, could we for once not have ‘gotcha gap’ at the open? I feel like a Texan strapped to a 2000 pound bull lately.

Watch this channel on the Cubes – as they are leading the parade down. We are near the bottom and once we touch 33 we should get a bounce to the upside. I think however that the medium term trend for the next few days remains to the downside – anything in between are merely well organized attempts to shake out any weak hands. Also remember to close any ITM options by the end of today as Wednesdays are usually the high day of OPEX week – after that the odds of your positions to move ITM drop rapidly.

Here are the hourly ES retracement levels for you to nibble on:

I set the 100% RL at 882 as I think this can drop a lot further today if/once panic selling sets in. SPX breadth ratio right now is a whopping 6.5:1 declining.

I will be back in 10 minutes – need to freshen up and make a pot of tea.

UPDATE 11:44am EDT: Quick update on the wave count:

The breadth ratio right now on the SPX are an astounding 10:1 declining – if you would believe that. This seems to confirm that we are now in a third wave which I believe could get us to 870 or even 860 easily.

I’m going to grab breakfast now – see you rats in a bit.