As expected, the market took a little hit today, finally relenting to the pressure of historically extreme readings in stock market indicators. The drop was lead by selling in energy shares, which followed the price of crude lower (at one point, crude was over 8% lower). At the risk of slicing expectations too thinly, I'm going to speculate on a possible path from here, and it starts with a small bounce:
As with the wicked drop from the February high, this advance may deny traders more than two consecutive counter-trend days until the entire move from SPX 875 is retraced. We also have strong support from a downtrend line and very weak volume on these past two declines. An up day, even a minor one, is due. I do not think the correction is finished, however.
If we see a B-wave bounce to SPX 815, the C-wave should traverse about 50 handles... like the A-wave... which measures roughly to the SPX 765 pivot. Alas, we may not see prices discounted all the way to 740, but we will still have a nice setup if the action plays out this way.
Precious metals held up rather well considering the liquidation occurring in just about everything else. Time and time again, gold and silver show the type of strength that could lead into a big run. There is nothing to add to the weekend analysis, so I'll spare us all the repetition, but suffice it to say I'm sitting tight.
On a general note, I'm leaving this weekend for a 2-week vacation to that tiny plot of land at the east end of the Mediterranean which is so coveted by three major religions. Although, I am not terribly religious, I do look forward to witnessing Easter in Jerusalem and visiting the old Orthodox church in Ramallah which my father's family attended until they emigrated in 1950. I have been told that there is simply a magical aura about the Holy Land that one feels regardless of religious affiliation or lack thereof, but to have roots there should make the experience particularly acute.
I will have my laptop and internet access in Israel, but I will not be posting. Instead, I'll drop some notes in the comments section on occasion. Anyhow, you should get at least two more posts out of me this week.