tuesday tete-a-tete

Good morningggggggggggg all,

Back from an extended break and so time to throw some of my thoughts into the mix.

Seems like the US and Europe have some sort of low in last night but where to from here is anybody's guess.

Back in December I suggested XJO 3500 was a key level based on weekly and monthly channels and thought it would close December at that level after a dip to 2800. Well we certainly haven't seen that drop yet and 3500 still seems the key.

The question is whether 3200 is indeed our low for now or is 2800 still a possibility. Looking at key XJO support/congestion levels there is a (rounded) 6400 intermediate high and a final high of 6800. The current low is 3200.

Now what is uncertain in my mind is whether the midpoint support/congestion level is 4800 or 5000. It looks like 5000 but it possibly could be 4800.

If 5000 is indeed the 50% point then the 3200 low should hold, being 1800pts from the top and 1800 pts from the bottom.

What I think is more probable though is (as I've suggested previously) that 3200 and the subsequent bounce are mirroring the 6400 intermediate high from late July 07 and the subsequent 400 pt drop to a 6000 base (ignoring the quick drop to 5500 and retrace from there) roughly mirrors the 500pts rally to a 3700 high.

Now, it took about 3-4 mths from the 6400 high until the final high at 6800. So if we mirror that 400pt blowoff on the downside then that may be suggesting we get a final drop to 2800 very soon. If this were to happen then it would give us a 4800 midpoint and possible target for the rest of this year.

On my reading of longer term channels I had also previously suggested last year when XJO breached 3600 that we had half channel support at 3200 and then a full channel support level at 2800. I thought we'd most likely fall a full channel but this did not occur at the time and I think the reason for this is this need to mirror the action at the top.