Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

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-- Brad Delong

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Tuesday, August 9, 2011

S&P Update

I'm taking today's low of 1101.54 to be the end of subwave 3 of 3.  The entire decline from the August 1 top of 1307.83 is 206.29 points.  Standard retracements would take subwave 4 to these values.

Today's close of 1172.53 is between the .33 and .38 retracement levels. 

Let's say it tops early tomorrow  at 1180, a retracement of about 79 points.  Subwave 1 down was only 64 points.  If subwave 5 is 1.62*subwave 1, then it would cover 104 points, and wave three would bottom at 1078.  With waves 4 and 5 ahead, an endpoint in the 1000 to 1050 range for this entire leg should be within easy reach.  This will take a few days to play out.

Update:  In comments, Susan asks if I factored in Europe.  I didn't.  But go to Yahoo Finance and check out the Dax, The Nikkei, the CAC.  This is not just a U.S. experience.  Stocks are crashing everywhere (and mostly had counter-current recoveries today.)  This only serves to reinforce my strongly negative stance.

Update 2 (10:10 a.m. Wed, 8/10):  Yesterday's close at 1172.53 was indeed the top of subwave 4.  Subwave 5 is in full force.  The SP500 gapped down to about 1144 at the opening and is now at about 1132, a drop of 3.4% for the day - in the first few minutes.  It's pretty interesting to watch this unfold from the sidelines.


Suzan said...

Are you factoring in Europe?


Jazzbumpa said...

Nope. This is just the S&P 500, all by its lonesome.