Wednesday, 10-03-07

The SnP 500 does not look like it will get much higher than 1551 if it even gets that high. The index has the look of a flat correction since the high on 9-19-07. That high was the last quality signal worthy of an option trade. The low at 1507 was not a good quality low and this high at the 1550 area is not a quality high. If this is a wave four flat then a drop back near 1515-1500 will bottom by Monday then rocket back up to a new high as flats are bullish patterns. If the index opens weak and remains weak late in the day then be alert for the drop toward 1515 by Monday and be ready to buy that drop is the strategy.