Chip Diller here. You know the refrain... Remain calm! All is well. I am saying this now simply because downside pressure sure to develop between here and bottom might lead you to push the panic button. Don't do it.
It could be another month or more before bottom finally is in. The next week or two probably will feature range-bound trading essentially going nowhere. Further confirmation of a pending bottom should develop as a consequence. Like I've been saying, expect the stock market's bottoming to be a process.
I'll keep this short. The final move to bottom probably will not get under way until such time as RSI rises above the level I have indicated on the above chart. Furthermore, any decline below the intra-day low set on Friday, October 10, 2008 should be quickly reversed. This applies as much over the next couple days as it will once bottom ultimately is set sometime in the weeks ahead.
As you know, the Elliott Wave Principle affords a considerable degree of analytical flexibility. In light of this I want to briefly tell you it is possible the market topped last October (indeed, this is likely) ... has begun its steep decline to the vicinity of levels last seen in 1994 (the vaunted Dow 3600 objective) ... and yet might soon bounce to such a degree as results in some major stock indexes setting new, all-time record highs sometime during the next year (believe it or not!).
I'll detail this possibility shortly. For now, just remain calm. All is well...
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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.
Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.
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