Update On Stock Market Scenarios

Take a quick peek at where we are in the stock markets:

Now take a look at the three scenarios I proposed in my last post and tell me which scenario we are in:

It is still hard to identify which scenario we are in but it sure looks like the “green” one. We retraced 40% hitting our heads at 1000 before dropping back down to 900. However, it is important to note that “wave b” peaked on Oct 14 instead of my predicted Oct 22, 2008, so things are moving much faster than I expected them to. Big moves to the upside or the downside seem to be regular events in this current marketplace. The 900 point retracement in the Dow [^DJI]] was expected, but I sure didn’t expect us to fill that 900 point gap in one day!

I’m bringing this chart back to your attention again because of the trend-lines I drew. Monday will be an important day in the markets, if we close above 1000 in the S&P 500 (^GSPC), a double bottom formation would arise…this should lead to another bullish run. So if we get a higher high, we’re off the races but then again, if we get a lower low, there’s a high probability that we will be continuing down. We might stop at 900 (”green scenario”) but we could also follow the trend-lines and head south to 830. Only time will tell.

For the time being, leave me with your comments on the markets. I would love to hear them!

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