S&P500 forecast from 08/06/2010 to 08/25/2010:
"Click on the chart to zoom in."The wave structure is getting complicated. At this point I'm not sure if today low (1039.38) is the 3rd wave or not? Therefore I'm going to use "alt-III" as the alternative wave until I get some clarity on the market direction. If S&P500 could rally to 1080 it should mark the 4th wave(see the chart "alt-IV"). I give only 20% chance for rally to 1080-1090. S&P500 should rollover at 1080-1090 and heads lower to 1010. If S&P500 breaks 1010 there is 80% chance S&P500 tanks to 950. If the 1010 level fails to hold, it means my original wave counts was correct and 1039.38 is not the wave-III. In this case 1010 will be the 3rd wave (wave-III) and 970-950 will be the wave-V that marks the end to sub-wave(3).
This is a "dead cat bounce" *1 not a buying opportunity. I would add to my shorts as soon as I see bulls running out of steam. On the other hand if S&P500 gets above 1131 bulls will have the upper hand. In this case S&P500 should rally hard to 1170.
*1: The dead cat bounce is a reference to a short period of recovery for a given security. While there may be a temporary and modest rise in stock price for the security, the momentum quickly ceases and the price either levels out or begins to drop again. Generally the degree of increase in the price of a stock is limited, and may involve a stock that was not considered favorable in the first place.
Source: wisegeek
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