Written by Harlan Pyan, AllAboutTrends.net
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Given the magnitude of the Syrian issue here there is a good possibility that the markets are going to be held hostage till some sort of resolution takes place. Then comes the what after effects.
As you can see this market really took it on the chin yesterday and sure we are closer to a bit of a bounce mode here if even for a day with the catalyst being Washington needs to make sure all legal ducks are in a row and UN inspectors finish what they are doing over there.
It would not surprise us to see something pushed out till after the holidays. And maybe just maybe that's what the markets are saying too today, meaning we have a few days till the weekend and we are oversold sitting on some supports short term. Whether they hold the next two days is another story. Really it's all about Friday into the close that's probably going to call the ball. IF we sell off into the weekend? It's fear of the unknown that's doing it.
Either way the market looks like it's on its way to a major support zone before all is said and done. We've laid them out below as to where they are. BUT remember we are in holiday trade low volume and we have a fluid situation that is still developing all into a three day weekend.
As you can see it sure is looking clear here from a wave perspective (advanced chartist tool). See where those MAJOR Supports are? See the wave count? ABC which is the same thing as 123. So the question here is? Will this be a 5 waves down affair to a serious support level? Or was it 3 waves (ABC) down and we are done. Given we've fallen this far and as hard as we have with so many unknowns hanging in the wings we are going to lean towards this being a 5 waves down affair (ABCDE). IF the C wave is done here? And it's going to end up being an ABCDE? We COULD be in the start of a D wave bounce mode here all right into the weekend.
That brings up where could 5 waves down take us before all said and done?
Take a look at the chart below. See that 1575 level? It's a big number and here is why.
It's the breakout into new all time highs awhile back which was resistance but now that it's broken it ought to become new support once tested.
Game Plan For The Rest Of The Week
Take it easy and do a lot of watching. We'll for the most part manage our current positions here and keep an eye out for opportunities on the long side as they start to show up. We are going into a holiday weekend here with virtually no volume to speak of combined with a fluid situation in the middle east. We can't think of a better time to relax and take it easy here.
BUT by the same token though we are seeing some names that are setting up here on both sides of the markets. Hence it's a market of stocks.
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