Fifth Wave?

It appears the 4th minor wave is complete and that the 5th minor wave is in progress. If you use Elliott Wave Theory as your guide, you can see that the Dow Industrials is very clear. Notice in the chart that you can easily see the wave structure from May 2nd. If you are an intermediate term trader, one strategy that you can use would be to cover your short position when wave 5 is complete and go long for the A-B-C corrective rally. The corrective rally could easily last until August.

Major averages look bearish

The S&P, the Dow Industrials, the Nazdaq, and the Russell 2000 averages have all broken through their 20 and 50 day moving averages. These are the averages on the Daily charts. This is a good sign for the Bears who trade for the intermediate term. The best strategy is to remain in cash or to be short the equities. The trend is down at the moment.

Downtrend! Just the beginning.

It appears that May 2nd marked the top at around 1370. The first wave from that point is around 1320. The second wave completed yesterday around 1350. Right now we are in the beginning of wave 3. The conditions are certainly right for a decline in the market. Jobs, industry, and home sales are terrible. And the prospects for a QE 3 are not good. The only thing QE2 helped was the stock market. My strategy for this decline is to short the indexes. A more cautious person would sell their stocks and hold cash or Treasuries.