Special Wednesday After-Close Update


(1) Earlier today in the "Market's Breaking Down," update the SPY put was erroneously identified as Apr $175. Obviously it was Apr $275 Put that was being recommended.

(2) A reminder that the key levels for getting progressively worried about the market going down in a big way are 25,000 (already broken), 24,200 (March's low so far) and then 23,360 (early Feb low of what should be wave 1 of 5 down). 

(3) The parallels between the weeks leading up to the 1987 crash (-25%) and the weeks leading up into this week are eerily similar.  An equivalent decline from current levels would be about 6,000 Dow points.

(4) Yesterday Robert Prechter sent out an interim bulletin making his case that, "The stock market should crash for two weeks in wave (3) and bottom on or near March 27." That is a bold and specific forecast, even for him. It also is in sync with the "sell weakness" game plan in (2) above. 

(5) I'm not a big fan of incorporating the news into trading, but if you are looking for a news-event to trigger a Wave 3 down, there is a smorgasbord of headlines to do it and it seems to be growing every day. 

Next Update: Thursday.