1 reply to this topic

[gannman]

ge to me has entered a wave 3. i have a target of about 14 for this stock. gg looks like it did 5 waves down bounced back up to the 50 dma and is now headed down in a wave 3. with ge in a wave 3 im going to say that this market is now in a wave 3 down the sp did about 87 points down on the first leg so i would expect about 145 points in a wave 3. this would bring us down to the 1160 to 1150 area. that is now my target for stocks my starting point for the sp was the june 1 high at 1345.2 fwiw not the may top g

[Jhoe]

Right on, I have a target of 12.50ish before end of 2011, in a worst case scenario where the SPX retests 1120 or so from above. So I've been selling it into any strength, most recently sold it around 18.80--but I actually covered 75% of the short thursday, pretty close to the lows at 18.05, based on two technical levels developments. First, we're just about at the point where AB=CD in this decline from the Feb high of 21.60ish--a natural profit taking place in the VST. Second, the .236 retracement of GE's entire move from March 2009 til Feb 2011 is just below us at 17.87. GE was practically there in the AH friday. Then theres a major fib fan line around 17.60 or so, again from the march 2009 lows. Probably get a chance to sell this one again closer to $20 before September. That said, if there's any sort of major financial institution shakeup, counterparty contagion, or other systemic financial event, all bets are off. thats what we probably need for our LT targets to be achieved, or surpassed. We'll find out a lot about the financial sector very soon--JP Morgan is at a very very major fib fan line, the XLF is very close to one, and as mentioned, GE, for all intents and purposes a financial stock, is at one too. If these names fall pretty easily through these .382 fan lines from the march 2009 lows, game on for the shorts. Some of the European banks have already done this, such as Barclays, and others like UBS are testing these supports for a 3rd time, and possibly not going to hold up. If the EU banks are any indicator of where US financials are headed, these so-called support levels are only going to be gaps where all the black box stop losses get triggered. I do not think that is going to happen in the VST. The EU "contagion" fear from sovereign debt is real, but its not the catalyst. The actual trigger event has to be based on some institutions inability to cover counterparty obligations in the CDS or other deriv underwriting business, ie AIG euro style. Or is the fear enough to start a tsunami of dominoes in the credit markets and banking system? I think the bounce or lack thereof in the US financials next week will be a very good tell of whats to come.