My correction prediction, for fun
I was wrong last time, but I will try again. Seems people are starting to talk correction, so heres my prediction, pretty specific:
Fundamentally: Earnings are starting to look terrible, bernanke knows he wont be in office forever, Europe is getting worse, China is slowing down, according to gann predictions more war will be next year...just a ton of bad going on with not much good. So, I have a short bias, so here is what my charting is telling me:
The rally is not over. We are finishing up a wave 4 correction. I think the market hits around 1423, then down to 1400 to finish wave 4. From there you have wave 5 which has all the typical buyers pushing the market higher...the hedgefunds who have been underperforming the whole year, the people who missed out on the huge rally who want to buy the dip, the people who think the presidential election is good for the economy, the people who feel good around christmas time, etc.
I think this whole wave up could take only 2 weeks. We either stall out around 1465 again, or more likely break to the upside and hit the upper channel line at 1480.
Once that happens, its all over. Europe a mess, fiscal cliff a mess, 2012 armageddon (lol), borrowing costs increasing, inflation kicking in. Probably sell off until around new years, bounce up a little bit in january, and then plummet even further.
I dont think it will be as bad as 2009 bottom because less leverage, and more liquidity, but I dont see why we cant drop 30%.
I am putting my money where my mouth is too...trading ES futures and selling options against my position.
Let's see what happens