No crash likely, IMO. Never was odds-on, but now we've passed the midpoint of the third wave down from this year's high. While I cannot guarantee that, I'd be very surprised if we crash now. Not so during the past 3 or 4 weeks.
The DJIA is a great chart, currently, and it looks darn clear to me. We're due a new low this month, and that would make five waves down from the April high.
Could be a larger ABC down from the year's high, leading to a substantial rally, and perhaps a resumption of the rally from 2002/2003. The fall from April would be "C" there.
Or, could be just 123, with 4 & 5 to come. There too, completing a fifth wave down should give a tradeable rally.
Short-term, I look for one more new low, coming in the move begun at today's high, likely. I'll be covering some shorts if we get this -- a fifth wave down in the move from the April high.
Since this year's high, the declines look impulsive -- with the larger trend, and the rallies look corrective -- against the larger trend. I remain fully, fully short, but am watching more closely now. Sentiment has declined, some stocks and indices and indicators are looking better, and IMO the Wave Principle is giving a high likelihood of bounces coming, tradeable bounces.
Months and weeks ago the Dow's pattern, oh so nice on that textbook decline into the March low, gave us good odds on what has occurred since, and it's been nicely profitable. Now that we've nearly got a finished three larger waves down from the year's high, the picture clouds a bit -- no way to know if we rally soon, having ended a correction from this year's high, or if we have yet to trace out a fourth wave up/sideways and a fifth wave down.
The charts will give us good clues as we go along.
Best,
Doug
Nearing a low.
Started by
PorkLoin
, May 19 2004 10:05 PM
1 reply to this topic
#2
PorkLoin
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Posted 20 May 2004 - 07:59 PM
5-20-04: From last week's low, a 60-minute bar chart shows nice ABC (up-down-up) corrections to yesterday's high in most of the major indices, and then check out a ten-minute chart from that high -- we have five little waves down.
So, the course to new lows for this move down from April is on track. I'm getting suspicious again -- the chart patterns look too good, too "textbook," but thus far their impulsive/corrective natures look unarguable, IMO.
When we get new lows, that will be the time of decision on the part of the stock indices. We're certainly due a low in here somewhere, and it might launch a fairly stout rally, or it might just give way to weak and sloppy sideways action -- a fourth wave from this year's high, prior to a fifth wave down.
Doug
