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Jan 20th, 2010: Daily Bullish and Bearish Model Updates

Posted by pugsma on January 20, 2010

8:30am (CST):  There is little doubt that we are coming into a critical time in the markets over the next few months.  There is correction on the horizon.  Just what shape and time frame the correct takes will help us to understand what comes next.  This morning I wanted to show both my Bull and Bear Daily Models.

Bullish Model (1-20-10):   Those that have followed my blog since it’s inception in late October 2009 know this bullish model very well.  It’s been my primary count and has helped many of those on the long side of the market continue to make money.  Here is the latest update.  I’m unsure if the coming correction is P2 or possibily only wave [4].  If the P1 top is in or nearly in here at 1150, then the P2 correction should retrace to at least 1050 (23%) and quite possibily down to 980 (38%).  If it’s merely wave [4], then a retrace to about 1055 is in order and P1 will make a new high at between 1250 and 1350 late next summer.

Bearish Model (1-20-10):  Believe it or not, I do keep a bearish model.  It’s the classic triple ZZ with a P2 top near 1150.  However, I do have an alternate count (thanks to my buddy Russ Wild) that could have the triple ZZ making a new high around 1230 (62% re-trace of P1: 1575 to 666).  If the alternate count plays out, then look for the A-leg of the triple ZZ to end here at 1150, the B-leg down to about 1050 and then the final C-leg up to 1230.

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