My mother, an impressionist artist, called this evening and asked me whether "the crash" was over. The London Independent quotes a female U.S. day trader "I'm down 20 per cent. What can I tell you?" This lady missed the big slide in prices because she was sunning herself on a beach in Mexico, but she has no fear. "This may be a bust moment for the e-tailers and e-commerce companies, but the big backbone companies like Cisco will bounce back. We're seeing a lot of margin selling but I think the market will hit bottom soon," she explains.

Now statements like these belay how complacent this market has really become. While the type spiky downside action seen in the last two days (given some of the big rebounds) could in some circumstances be viewed as a finale to a move(maybe the B wave in a big Dec-Mar A-B-C 4th. wave chop), somehow we feel that this is potentially more serious...something is still building, instead of resolving itself. The average stock holder may be doing some reallocating of his portfolio between different sectors, but he has yet to flee equities altogether. Until that occurs for more than just 24 hours, the dislocations are likely to have only just begun. We still like a count on the DJIA below of a I-II... with a III wave decline potentially directly ahead.

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.