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(2/13/16)
A chart of the S&P 500 shows that it tested it's longer term
upward trend line from the 2009 low this week just above the 1800 level.
Meanwhile the S&P 500 bottomed on Thursday as it completed a
5 Wave pattern to the downside which was followed by a decent oversold bounce on
Friday. Typically after you see a 5 Wave pattern complete it will then
retrace on average from 50% to 61.8% to the upside as an oversold rally
occurs. In this case that would give us a target range from 1964 to 2000.
However I continue to be concerned with the lack of investor
panic as the market has been falling. Once again the 5 Day Average
of the Put to Call Ratio never rose above the 1.25 level like we have seen with
other corrections since 2009 (points A). This suggests to me that after
the oversold bounce ends that the market will eventually head lower again.
Amateur Investors
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