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Courtesy of David Grandey
“One look at the daily charts show that we tagged the 38.2% Fibonacci retracement zone and instantly got a reaction off of it to the downside.
What it also means is that if that happens then odds favor Wave 5 is underway and that means retest of face of fear lows if not lower.
Tuesday we tagged the 38.2% Fibonacci level and Wednesday as well. It’s starting to act as inability to bust through higher. If that was it to the upside (leaders the last two days sure are saying it was) then this market is really weak.”
Over the weekend we said:
“Right now we still need to treat this as just a Wave 4 bounce. We’ll know in the next few days if that was it and a retest of the lows for Wave 5 down is in the works.”
As a result, on Wednesday we closed out of our long positions and went long on an inverse ETF. We also issued alerts to initiate short-sell trades in four stocks.
TZA — INVERSE ETF
46.14 to 58.51 in 2 days — a total gain of over $1,500 based on a 125 share position
SHORT SELL TRADE — TSLA
An 8% gain in less than 24 hours!
Total 24-hour gains from our inverse ETF and four short-sell positions — $3,734!!
WHAT’S NEXT
The S&P 500 September 2010 lows are at 1050. IF when all said and done this Wave 5 we are currently in doesn’t stall out at a retest of recent lows (1130ish) here, then the next stop COULD be that 1050. We’ll find out soon enough. What is interesting is that the 1050 level could be construed as the neckline of a developing monster 1-year head and shoulders top.
Over the coming weeks we are going to be laying out a game plan for those with 401K plans as we have started to receive a fair amount of questions about them. All along the lines of “Help, what am I to do with it”. We’ll start covering that soon.
Don’t miss any of it because its a big deal and for that we need to cover the big macro situation out there over the next year. Why? Because of what we are seeing technically as well as fundamentally it will have a big impact upon all who have them. Think:
HOW DO I PROTECT MY 401K over the next year!
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