1066 - Might have been a very good year, but for today's SPX low?! Possible opportunity

Yes, it was a wild ride today! When I tweeted during the morning about trying to buy what looked like a low around 1150 / 1152, I stated keeping it "light and tight". There's a REASON for that type of approach when trying to catch a falling knife, and today was a prime example! That tight trading position means to include a tight stop (and keeping it light in the spec (speculative) amount bought too, because you can always add more if it starts taking off and you don't want to risk too much when you open such a highly speculative intraday trading position)(my style anyway!). Obviously a lot of stops got taken out and probably a few nimble traders were able to place continuation sells as the indices plunged. A "scare low" at 1066 meant the SPX was down 100, the Dow down 1,000, and finally it started looking like a capitulation low. Even though it's TOO SOON to confirm of course!

Yeoman Elliott Wave analyst Tony Caldaro, whose site and posts feed are both at the right side of the page here, had a great set of comments in his update this evening. Read the whole thing, but here is a quote:

What a day! After an orderly decline to the OEW 1146 pivot around noon, the market tried to rally back to the 1168 pivot but fell short by a few points. After that the market started making new lows for the day around 1:30 and then went into a free fall. At today's lows the SPX was down exactly 100 points and the DOW was down nearly 1,000 points. Quite an incredible drop in just a few hours. Uncertain as to what caused the panic selling, lots of negative news surrounding the markets these days. Certainly the decline was much more than expected. We thought that the OEW pivot at 1107 would be major support. Pivots do not seem to matter when market selling turns into a stampede. Prices go down a lot faster than they go up. Nevertheless, the market made a sharp recovery after the selloff. And, we could speculate to state that today's low may be the low for the downtrend. We'll let the market make that decision in the days ahead. With that in mind we do not see any reason to change any of the counts for the major indices at this time. Best to your trading!
MEDIUM TERM: downtrend hits SPX 1066
LONG TERM: bull market
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

So, that's an example of why we like to keep up with Tony's daily updates (in addition to those of Terry Laundry, not to mention Andre Gratian's subscriber comments, and ChartsEdge when they provide them publicly). As for me - Below I'm showing you 3 charts. First, the NYMO (McClellan Oscillator applied to the NYSE ($NYA)), with some of my line markings and notes on it. It shows that the Oscillator is oversold and trying to make a low to bottom and start back up again. It hasn't turned YET and so how you play this clearly depends on your risk profile, trading timeframe and style! The classic swing trader will of course look for followthrough. That should show up in the hourly charts with a solid pattern starting higher highs and higher lows, but even a positive divergence for the lows on the hourly chart would have been nice. We'll see. The other charts below are the daily and weekly SPX. Check out how the weekly SPX turned back from important moving average resistance! And the Summation Index (SI) on that NYMO chart shows it poked under its moving average (I marked that with a circle saying it's concerning). If the market "behaves badly" then it could mean a possible new high around May 20-21 still, except with the SI re-testing that moving average from below.

But it doesn't mean that we abandon our plans for seeking a higher high in late May, let alone in August. That's still our basic plan for this year 2010. So we're looking for a low to buy, too. I kinda really had thought we would see that low yesterday, but obviously the market had other ideas. Because of the depths tested, we're already seeing SPX 1030 / 1036 as a resistance level, with significant resistance likely to show up next at the 1050 / 1053 area (since broken support is now important resistance). One day to the weekend ... and then the May opex will be on Friday, May 21. Will be an interesting game from now until then!