Say what? I thought we were done ...

Yesterday
The market got exactly what it needed yesterday with a bailout support for AIG. I was a bit surprised at not getting a rate cut in the afternoon (decision that lost me a bit of money hah) - but I understand the policy and looking back at it now - I feel the feds made the right move there.

Price wise, well, I have to admit I am gloating a bit here. I predicted 3 low points, price ranges we have not traded in for years now - yet the accuracy is as good as it can get. The low of the day ended up being 1169 right at my forecast. The second low represented a significant support range after the fed announcement in the afternoon, the market dropped 20 pts in 1 minute and found its bottom right at the 1174 range. Having prepared myself for this number I was able to enter a position and lock in some gains.

Today
Well the bad news is not over, AIG got bailed out, and housing presented some pretty horrific numbers today. Considering our pre-market behavior I would expect some testing of the lows I presented yesterday.

Time and Price
3rd high 1229
2nd high 1221
1st high 1217
1213 open/close - keep in mind we have another gap opening today so lows will be "highs" as well throughout the trading day
1st low 1211
2nd low 1200
3rd low 1195
4th low 1187
5th low 1175
6th low 1169

I feel we will be holding at the 1175 range today and recovering back into the 1200s. If we are not to see a 1200 we will make new lows this week.

Mid Term
My anticipation is that the low from yesterday will stick for the next 10 trading days and we should see at least an 70-80 point gain from the 1169, market definitly is not looking like it today but the overall trend is positioned for this rally before breaking down again and creating new lows. It is also very possible to continue our slide to the downside but as I said yesterday, there is little room left for more down turn at least in the next few days. If we are to continue on the downside and see new lows the sell off will become more dramatic and the first 10xx will be here by beginning of October.