Currently I am unable to post charts so I will do the update today without the benefit of visual aids.
The market continues lower and the volume continues to dwindle, which is a plus for the bulls.
The NASDAQ has taken out its lows and this is definitely a bearish event, as it signifies a 5 wave structure down from its highs in November of 2007. This event officially places the NASDAQ Composite in the bear market category, but all is not lost here. The good news is that with the 5 wave structure down we can now be looking for a bottom to come into place at which time a substantial rally will begin and allow us the window to hedge our already light equity exposure.
I have downside targets for the NASDAQ at 2160, 2140 and 2120 Maximum.
It is at these levels that I will begin to load up on equities for the inevitable rally in stock prices.
The other good news is with our very light 50% allocation to equities, the sting from this decline has been very minimal and upon taking advantage of the up coming snap back rally, we should be in an excellent position to begin our protective hedge process.
So for now, remain with the very conservative 50% allocation, but be ready to bump this allocation up considerably as we draw very close to an intermediate term low!