1/11/20099:43 PM
This is a high level view of the current zigzag thesis. We are at the price target discussed
in past reports. 883/885 is a Fibonacci confluence between a 50% retracement of the A-
B-C move up from X, and a .618 extension of the move down from Y. We are also close
to the most recent active trend line. This level, and just below it is formidable support.
The support levels just below are 871, the .618 retracement of the A-B-C move up from
X, which is a closer intersection to the trend-line, and then 864, which is a Fibonacci
confluence of a 1:1 ratio extension down from Y and a .382 retracement of the entire
move off the low.
A turn up from any of these levels would support a third extension of the double zigzag,
most probably another zigzag (follow “price target” link above).
A breakdown of this entire support zone would introduce considerable downside risk.

1/11/20099:43 PM
If I align with the cash to identify mutual strong support levels, we have the current level
887, which directly coincides with 883/885 in the e-minis, and then 869/871 which aligns
with 864 in the e-minis. It also tags the bottom of the regression trend channel shown
below.
My preference in the very short-term timeframe (60 minutes and less) is that there is
another wave down. All things considered in this analysis, I have a slight bias for the 864
e-mini 869/871 cash level as the most probable turn target, but I want to see a breakdown
at 887 cash first.
TMD/DW
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