12/31/20085:29 AM

In the very short-term we are at a resistance level that presents pattern risk. Price has retraced .618 of the move down from 12/17/2008 and a 1:1 ratio up from 12/29/2008 as shown on chart1. Chart1

Unfortunately, a 1:1 Fibonacci extension of the wave down from 12/17/2008 goes to 830 which is a confluence with the .500 Fibonacci retracement level of the entire move off the low and a symmetrically attractive target. This is shown on the second chart below. An extension down to 830 will not negate the intermediate thesis but it will certainly delay it. A sharp move down today targets this confluence. On the other hand, if the 895 resistance level is dispatched quickly with minimal retracement, then price targets the 910-920 resistance zone overhead. This will corroborate that the next wave up of the intermediate term thesis is probably underway.

12/31/20085:29 AM

Chart 2

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