Crash part 2 – the final leg down (wave 5) in progress

The weekly SPX traded as expected – snapped back to the Bollinger and turned around in the same week, which is bad news since we will make new lows heading for the 2002/3 low area of 770. That is still a 15% downside and will definitely be ugly. We are in a week 7 but count 9 that means 3 lower weekly closes required. That should bring us below 800. Even volume picked up on the way down, which is a negative confirmation but it was an overall mediocre volume day or comparatively low to last 2 weeks. The FED will have to cut rates soon but I am afraid, as Mr. Trichet made clear, that these measures need time to filter through that they might hesitate again. Basically, I hear my theme popping up more and more on TV now, which is revaluation of the market by PE’s and I even heard my benchmark of 10 being quoted – interesting. More later.

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~ by behindthematrix on October 15, 2008.

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