THE DOT - if this turns orange or red be alert

Wednesday, July 23, 2008

update on technical situation

The impressive reversal of the NDX and the overall strength of the market yesterday implies that wave A is not over yet. The decline from mid-May in the DOW and SPX has a 38.2% retracement at 117200 and 1293, which should be reached before a counterwave will occur. Nevertheless, today and tomorrow might be a bit tricky. Plenty nervous shorts are out their waiting for a pullback, which will come at some point a retest the lows, but the timing and price magnitude might be painful - but a little pullback later today is very likely lasting into tomorrow.

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