Another big down day for stocks? That's how it looks if you draw a line chart, or only pay attention to closing values. But today's SP500 move - a big gap down at the opening with a continued decline to about 1126 in less than a half hour, a choppy sideways move for the next 2+ hours, a rise to about 1160 at quarter past 2, ending with an impulse drop to 1120.76, the day's low - is all contained within the previous day's trading extremes.
In fact, it's all contained within the the last hour and 17 minutes of yesterday's trading, when the index jumped from its low to its high for the day.
From my red Update 2 comment here, I'm taking this to be components of sub-waves 4 and 5 of wave 3 down. It's possible, though, that we're seeing lower level waves unfolding within 3 of 3.
A problem with real time analysis is determining what level of trend you're observing. That sometimes doesn't get sorted out until after the fact. Either way, though, there will be lots of downside movement ahead - at every level of trend.
I've been in a mostly cash-like position for years, so I am not directly affected by the stock plunge. Of course, a receding tide grounds all boats, and I'm still a member of this country's economy. As fascinating as it is to watch this debacle, I can't claim that it's fun.
Wednesday, August 10, 2011
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