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Long term outlook: UpMedium Term Outlook: DownShort Term Outlook: Sideways to DownRevision Point: Break above 1260Potential Medium Term Targets: 680 and lowerPreferred Strategy: Take short term positions only, till we see an end of the corrective phase..The market saw a decline during the last week. We may have seen the completion of wave II.3 at the March 3, ’10 high (1045.10) – as shown in the main image. This would imply that we are now in the third wave decline. If this is correct, then we are likely to see the swiftest and the longest sell off awaiting us in the upcoming days, without getting a break above the March 3, ’10 high at 1045.10. This sell off, if it is a third wave sell off, is likely to be longer in magnitude than the sell off witnessed from December 3, ’09 high (1226.30) to the December 22, 09 low (1074.90).
Alternatively, the March 3. ’10 high may not be a completed wave II.3, but rather a wave b of a possible second wave Expanded Flat correction underway, after the completion of a possible wave i.C.2 at the February 22, ’10 high (1130.85). If this scenario is to hold valid, we are likely to see a wave iii.C.2 rally in the upcoming days, taking the price above the February 22, ’10. However, before this rally, we are likely to see fall below the February 25, ’10 low at the 1087.72 mark, possibly to between the 1080 to 1070 mark, completing wave c.ii.C.2.Copyright © 2010, the Trading Solutions, All Rights Reserved.
