We are definitely forming a short term bottom
Yesterday I wrote
"8218 is our new up price target (8090 + 128 = 8218)
Failure to reach 8218
Cancels out this short term move up (bounce)
Then expect a test of 8090"
Yesterday we reached 8213
8213 -128 = 8085
Therefore 8085 was the short term down price target..
After failing to reach 8218, we then headed back down, reaching 8070 in the over night session; Achieving the short term down price target at 8085..
8070 + 128 = 8198
Therefore in the next few hours (1 to 4)
8198 is our next up target.
New Chart Pattern:
Up Target: 8339
Down Target: 7961
If and when we head back up I'll update with new Resistance levels,
Currently we have resistance at 8371 to 8381
And very strong resistance at 8500..
In short I'm looking for a Bounce back to test the 8500 level
The bounce should be no longer than 3 trading days.
A 2 day rebound is the minimum.
By: Reuters | 15 Jan 2009 | 07:32 AM ET
LONDON (Reuters) - Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode.
In a highly bearish note, veteran cross asset strategist Albert Edwards said investors should now cut equity exposure after a turn-of-the-year rally and prepare for a rout.
He predicted that the S&P 500 index of U.S. stocks could be set for a fall of around 40 percent from recent levels.
Edwards also raised the danger of a global trade war with China.
"While economic data in developed economies increasingly reflects depression rather than a deep recession, the real surprise in 2009 may lie elsewhere," Edwards wrote.
"It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression."