RE: SC - todays activityOverall a very interesting day. Gold was hit hard, the Euro rose and the USD fell.
The bounce for financials last Friday was weaker than I was expecting at the time. This makes me think the larger bounce is still most likely coming up next. I usually hit my targets pretty close but sometimes my calls are a few days too early. This may be one of those cases.
Bottom line there is still room in my model for a large rally in the financials especially and S&P to a lesser extent. The important point here is that if the mkt is going to rally it needs to happen fast. It would have to be ideally a one or two day wonder then quickly collapse. If the market cannot rally in the next few days (or it is just a very weak rally) then I can only assume that it won't happen, and that last Friday was just weaker than I expected.
So I am leaning towards the rally here and that would fit nicely with the Nov 2008 patterns, and my model. A standard short squeeze is a reason why it could happen....
The 87 style crash is still possible so I'm mindful of that (unlikely as it is). It should be possible to recognize with a little notice if that is going to happen.
So far the timelines look good to me. I will have a better idea once I see the next few days trading.
SC