1/22/200910:03 PM Pacific

Take a close look at the history of support and resistance at the 50% retracement level of the move up from the 11/21/08 low to the 1/06/09 high that was tested and re-tested over the last couple of days. This has been a key pivot level since 10/27/08, and here we are again. Even though there is some difficulty on determining the wave count at this juncture, I will focus on this important pivot to help me determine which of my wave count options will be the probable outcome. NASDAQ100 e-minis

If this level fails, then it could be a spectacular failure. A wave (3) of 3 watershed event is the likely outcome as shown on the chart below. 1110 could be a turn, and a bounce is very probable.

1/22/200910:03 PM Pacific

Watershed Down

If the all important 1150 level stays below price action and we work higher, then we have either the expanded flat option shown here… Expanded Flat

1/22/200910:03 PM Pacific

Or, an A-B-C pattern up from the adjusted 5 wave count as shown in this chart. 5 wave variation and A-B-C count

These options are listed in order of my preference. TMD/DW The market detective provides personal market opinion based on sound technical analysis and research. However, no warranty is given or implied as to its true reliability. The market detective will make errors and mistakes. The market detective is not an investment adviser and is not making recommendations to buy, sell, or place orders relating to the futures contracts, ETFs, or stocks that he writes about. The responsibility for decisions made from information contained in this service are solely that of the individual subscriber. The individual must fully research and make his/her own decisions before acting on any information provided by the market detective. The market detective assumes no responsibility for subscriber investment or trading results.