Wednesday, 23 May 2012

1pm update - Ugly'16

The market continues to slide. The hourly cycle charts show no sign of a floor until at least sp'1280 - which would appear likely early Thursday. VIX is still trying to break the recent 25.50 highs. A close in the VIX today in the 26s..would open up a possible brief spike into the 30s tomorrow. More on that idea later.


SP'daily, bearish outlook


The daily chart down-channel would allow sp'1270 tomorrow. Anything under 1265..and we would see freefall to probably 1200/1175 - with VIX in the mid 30s.

A fall to the 200day MA @ 1280, would make for 135pts down across 17 days. That is one very strong minor wave'1 down. We are of course still due a minor wave'2 UP. If 1280 is the floor, then a move all the way to 1370 would still be viable, although 1340 would be first target.

I am holding short until sp'1280 tomorrow morning.