3. Openings are sharply lower as expected and we are about to retest the Friday lows that very likely means my SPX target of 1170 will be exceeded this week as SPX makes the 9 count today and has already per Friday a Combo 10 – which hints to the probability that wave 3 down will exceed slightly and we test the 200 week MA at 1150. Crucial for the week though is still the 1170 level as it is the channel support and we are deep below the weekly Bollinger band a snap back from the 1150 is very likely as the FEDs meeting this week could likely announce QE3. The trick is usually a lower close today will produce an 11 count and with 13s you have a good chance for a temporary counter-move under the current conditions. Overall the downtrend has just started but for now part of the downgrade was already priced in on Friday by some insider sellers. Plus we will have again insider buyers as the FED will give some banks the buying opportunity to be more successful with the upside manipulation.
SPX should make a bottom for wave 3 in the 1150-70 area and with QE3 bounce around 100 points, clearly also depends on the EUand ECB actions as this is not a downgrade alone problem at all – the world is burning and the second phase of the depression which will be called double dip recession again wih another looming war consumers will fasten their seat belts and stop consuming , exception may be still China for a little while but I think they wil be in trouble as well shortly.