05.03.2011 Update Correcting the correction

We are still in the middle of the expected correction. Looks like we finished a clean 5 waves down for A of an ABC pattern correction. We started B up at the end of the day. I think we might open down a smidge tomorrow as a fake out and then rip up a bit for B, that should about do it for tomorrow. After that will be C down.

C down gets a little dicey. In both the S&P and Trannies, the C wave of this correction must stop at the blue line in my charts. It would mean the C wave needs to be pretty weak. Below the blue lines get dicey and I will have to pull out further than a 20 day chart to figure out where we might go from there. We would have to close below those lines.

IF that happens, we'll re-evaluate and create new probably paths. For the moment though, I would assume we'll hold those lines, finish this correction and then head back up for another big wave north. I'm still targeting something around 1430 as the top of the rally from March 2009.

The charts for tonight are just updates of what I posted yesterday, the market pretty much followed the paths that I had outlined today.

2 things could happen tomorrow. We could follow the paths outlined in the charts, or we could just collapse below the blue line. If we collapse below the blue line, I will attempt to post an intra-day update with a quick update of where we might go and potentially how to play it.

This is the S&P chart, following the projected path so far;



This is the DJT chart, it broke down out of the megaphone top and should follow a path similar to the S&P;




GL