From a week ago: >>Down for a 1st wave from the all-time-highs to the low of 2002, up to this year's high for a 2nd wave.
Down to this past March's low for a 1st wave, up to this month's high for a 2nd wave.
Now we've gone down again, and it looks impulsive to me; it looks like the larger trend is down, and the upward moves are corrective. We may bounce higher here, correcting the steep decline of this past week, but once again it looks like a very low-risk sell in the stock indices, with the possibility of catching a big move down; that being the awe-inspiring 3rd wave.<<
5-7-04 It's looking good for the above analysis. The Russell looks like a third of a third down from this month's high, which is also the post-2002/2003 high. The other indices I follow aren't below the March lows, but the "triangle" formation possibility from this year's highs isn't looking like a decent bet now, and the exceedingly weak breath lately makes me think more decline is to come.
I have a larger short position than any time since May 2002, and may add to it -- getting up to the "load the boat" levels of September 2000 -- the same deal back then, ending/having ended an upward correction in an overall bear market (my perception, naturally).
Doug
Wave 3 down?
Started by
PorkLoin
, May 08 2004 12:29 AM
2 replies to this topic
#2
PorkLoin
-
- TT Member*
-
- 2,194 posts
Member
Posted 10 May 2004 - 08:54 PM
5/10/04 Okay, down we go. Finally below the March lows for the DJIA and S&P -- fulfilling the deal set up by the initial five-wave declines into that March low.
Next point of interest is where the declines from the April high will be equal in length to the fall into the March low. If the rally from 2002/2003 is not over, an equal leg A and C within an ABC from the yearly high would fit well. I rate this as lower probability.
One thing that bothers me is the Nasdaq -- strongest when the rally was on; I'd expect it to be the weakest now that we're going down. However, it's not yet below the March lows, so the market still has plenty of tricks up its sleeve. (Ha Ha, Dougy -- needless understatement there.)
While there is no guarantee that we have topped, long-term, since the 2002/2003 lows, we are also at a juncture where a crash could occur. The indices, while oversold, are not at "screaming buy levels," especially in the context of this now-obvious third wave.
I remain maxxed-out short. Good profits now, and expect a bounce anytime, same as Friday. No reason on the charts that I see to abandon the nearish case.
Best,
Doug
#3
PorkLoin
-
- TT Member*
-
- 2,194 posts
Member
Posted 17 May 2004 - 08:52 PM
5/17/04 Okay, still acting weak, but we haven't really rocked and rolled down yet, and the pattern is looking like it may be near a rally. The Russell 2000 looks nice for a five-wave A down, then B up, and now another C down, which could be nearly complete with five waves of its own.
I see the Dow and S&P the same, although their highs this year came earlier. First wave down to the March low, then up to the April high for the second wave, and third wave down since. If this is all just ABC, then we could well be near the end of C. If it's 123.., we haven't had much downside acceleration for the third wave, and I'm suspicious.
Under bearish counts, we could be doing a series of 1s and 2s down from the April highs or the late April highs. I like this count better in the Nasdaq, but all the indices will act the same if we are soon to have a violent "3rd of a 3rd" down. Rare indeed is the occasion when one can see the 1s and 2s and correctly call the big subsequent move.
I'm still fully short, giving the bear the benefit of the doubt. And there's a good bit of doubt, now, since we could be simply correcting down from this year's highs -- the charts haven't eliminated it, and in fact the charts look like a possible nearly-completed correction in the various indices.
So, a five-wave move up on an hourly chart, and a corrective move afterwards, down or sideways, would have me covering some shorts. I still rate a bullish outcome from present levels as lower probability, but in my opinion the indices really bear watching right now, versus after the April highs (early or late in the month). Back then we had five waves down, a corrective move up, and it was a very good bet that more downside was to come. Now the chart patterns support a move either way.
1. Could be in a correction from this years, highs, but I doubt it, for now.
2. Could be going down in earnest, and just finishing up wave 1 of 3 of 3. This would lead to a sideways/up correction and then some fireworks to the downside.
3. A plunge might be right around the corner, if we're doing the 1s down and 2s up, but at some point this thing has to break down bigtime if that's the case.
Doug
I see the Dow and S&P the same, although their highs this year came earlier. First wave down to the March low, then up to the April high for the second wave, and third wave down since. If this is all just ABC, then we could well be near the end of C. If it's 123.., we haven't had much downside acceleration for the third wave, and I'm suspicious.
Under bearish counts, we could be doing a series of 1s and 2s down from the April highs or the late April highs. I like this count better in the Nasdaq, but all the indices will act the same if we are soon to have a violent "3rd of a 3rd" down. Rare indeed is the occasion when one can see the 1s and 2s and correctly call the big subsequent move.
I'm still fully short, giving the bear the benefit of the doubt. And there's a good bit of doubt, now, since we could be simply correcting down from this year's highs -- the charts haven't eliminated it, and in fact the charts look like a possible nearly-completed correction in the various indices.
So, a five-wave move up on an hourly chart, and a corrective move afterwards, down or sideways, would have me covering some shorts. I still rate a bullish outcome from present levels as lower probability, but in my opinion the indices really bear watching right now, versus after the April highs (early or late in the month). Back then we had five waves down, a corrective move up, and it was a very good bet that more downside was to come. Now the chart patterns support a move either way.
1. Could be in a correction from this years, highs, but I doubt it, for now.
2. Could be going down in earnest, and just finishing up wave 1 of 3 of 3. This would lead to a sideways/up correction and then some fireworks to the downside.
3. A plunge might be right around the corner, if we're doing the 1s down and 2s up, but at some point this thing has to break down bigtime if that's the case.
Doug
