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Thursday, April 2, 2009

Gaps, VIX and 1938




Gaps. The Market is gapping up, down and all over. And they are filling so far except of course the kick-off gap sub 700 and my "marker" for a wave 2 low area, the 768-772 gap (although I have mistyped this so many times lately I wouldn't doubt you may be confused!). Today was a gap up. and it exists from 811.03 - 814.53. Now if this is a wave 3 of A, then this gap shouldn't fill. That's wave theory. Wave 3's do not have overlapping type moves. And a move down to 810 would be a complicated, overlapping subwave beginning to this wave 3. If it is a wave 3, that gap may not fill for quite some time. Maybe on a B of P2 wave low. But that is a ways off so no need to speculate.



The VIX chart is a curious thing. It still feels a need to maintain above its gap that it has been floating above for months. It again managed to claw its way over its 200DMA mark at the close today and stay over 40. The VIX is telling is us something. The triangle move I have mapped for it means it has one more up move. I expected the VIX to break down and fill its gap if this is a wave 3 and perhaps if it is wave 3 that move on the VIX is coming shortly. But like I said, it was curious today. The bottom line is that there is still a lot of fear out there. But so far the sellers are still exhausted.


Lets see if that 1938 pattern plays out. That would mean (I think) a C wave down to wave 2 low.


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