As already mentioned in my earlier update I expect a rally to 1330-40 (probably even to 1360 though):
I'd like point out that in 2011 we also got what appeared to be five waves down. It turned out not to be the case though. So if we get a rally into that 1330-60 area I'd like to see some kind of a reversal first before considering to go short.
You probably noticed that in my big picture update I showed the five wave move down only for the SPX and the Nasdaq. The reason is quite simple: there is no five wave move down for the Dow:
As you can see it will be very interesting to see what happens at SPX 1330-60/ Dow 12600-12800. If we reverse, another sell-off into late 2012 should follow. If we break it, a huge rally similar to late 2011/early 2012 should occur.
So short-term it looks like the most recent lows should hold. Medium- to long-term though the situation remains very unclear.
