RE: Still a crash scenerioI found some interesting facts looking at past crashes:
From April to Oct 1987 the weekly chart is a very similar pattern to the Jan to current weekly pattern on the S&P. The market fell 27.9% from this point in 1987 before bottoming. If the same pattern were to hold then we would see 808 S&P at the bottom.
Now get this, in 1987, the bottom came 39 days after the top. The 39'th day after the April 2010 top is this coming Monday.
From Oct 10 to Nov 4 2008 the S&P daily pattern is similar to the May 21 to present pattern. In 2008, the S&P dropped 26.5% over the next 13 trading days. If the same pattern were to play out then we would see 820 on the S&P in early July.
If I use the Elliot wave count with Wave 1 from the S&P 1220 high to 1040 that is a 180 point drop. Now assuming we are starting wave 3 at current levels then if I take wave 1's 180 points and multiply by the 1.618 fibonacci, I come up with a 291 point drop for wave 3. If I substract 291 off of 1120, I come up with an 829 target.
Just playing with some numbers here to see what kind of target makes sense should the market crash now. One thing these patterns do confirm to me is that this is one of the rare occasions when the market conditions are such that we can see this type of extreme crash.
Some other things I noticed today is that Libor has been spiking since early June. This also happened right before the 2008 crash. The USD was up today even with markets rallying. This may be indicating a stealth flight to safety by the big boys.
I'll have more tomorrow....
SC