Today is 110 trading days from the November 16 lows matching the final 110 day rally into March 27,2000 before the Nasdaq proceeded to meltdown. 12 tds from the nominal SP high on 4-11 similar to the 10 trading day double top in March 2000 which only saw the $ndx make a new high on March 27…..So far no real new high anywhere except possibly the $nyse. 1043 tds from the 3-6-9 low.
Guys, I didn’t have time to do a new post… sorry about that. Nothing much has changed really, except for a few minor things.
First, instead of a new high (with the 1630 zone being the target area) being put in on the preferred date May 22nd (or the alternate date May 29th) I think we are going to put in that high next week after choppy around all this week to get some bulls long and bears short with stops just above 1600 zone.
Some how I’ve always thought that the sell off after Legatus would be a wave 3 down and now I see that as possible. Assuming we top early next week then we’ll have 2-3 weeks left to put in the wave 1 down and the choppy wave 2 up… which I say “choppy” as I don’t think it’s going to be a huge re-tracer wave like they have been in the past. This means it won’t need much time either… maybe a week?
This first wave 1 down shouldn’t scare anyone as it is designed to keep the bears sleeping and the bulls thinking it’s just another pullback to get long on. From looking at the past sell offs they tend to move in 80-100 point ranges, so I’m expecting about the same on this first wave.
Since I’m expecting a new high early next week that “high” will make the “head” in a “Head and Shoulders” pattern with the prior high of 1597 spx then being the “left shoulder”. That leaves the rally up for the wave 2 to make the top of the “right shoulder”. In this case I think it will end around Legatus but it won’t go up as much as people expect.
The reasoning behind this is the fact that everyone will see the H&S pattern and will be expecting a high close to the 1597 left shoulder. The best way to trick the bulls that are long and the bears waiting around 1597 is to fail to even get close to that level again. The bears will be forced to chase it down as wave 3 starts and the bulls won’t believe their eyes when it starts down hard again.
So if we assume that the bottom of the first wave is around the most recent low of 1536 then the bounce back up for wave 2 (and the right shoulder) should stop at a lower Fibonacci level like the 38.2% or the 50%, but not the typical past retracements that are almost 100%.
In order for wave 3’s to start and have any real scare effect they are usually preceded by a weak wave 2 that lures in dip buying bulls and catches the bears asleep. This is why I’m not expecting too much on the wave 2 up. But for now lets focus on catching the top of this move so we can be short on the wave 1 down.
Today is 110 trading days from the November 16 lows matching the final 110 day rally into March 27,2000 before the Nasdaq proceeded to meltdown. 12 tds from the nominal SP high on 4-11 similar to the 10 trading day double top in March 2000 which only saw the $ndx make a new high on March 27…..So far no real new high anywhere except possibly the $nyse. 1043 tds from the 3-6-9 low.
SPY Chart analysis: http://niftychartsandpatterns.blogspot.in/2013/04/spy-chart-analysis_30.html
Facebook resistance levels: http://niftychartsandpatterns.blogspot.in/2013/04/facebook-resistance-levels_29.html
Guys, I didn’t have time to do a new post… sorry about that. Nothing much has changed really, except for a few minor things.
First, instead of a new high (with the 1630 zone being the target area) being put in on the preferred date May 22nd (or the alternate date May 29th) I think we are going to put in that high next week after choppy around all this week to get some bulls long and bears short with stops just above 1600 zone.
Some how I’ve always thought that the sell off after Legatus would be a wave 3 down and now I see that as possible. Assuming we top early next week then we’ll have 2-3 weeks left to put in the wave 1 down and the choppy wave 2 up… which I say “choppy” as I don’t think it’s going to be a huge re-tracer wave like they have been in the past. This means it won’t need much time either… maybe a week?
This first wave 1 down shouldn’t scare anyone as it is designed to keep the bears sleeping and the bulls thinking it’s just another pullback to get long on. From looking at the past sell offs they tend to move in 80-100 point ranges, so I’m expecting about the same on this first wave.
Since I’m expecting a new high early next week that “high” will make the “head” in a “Head and Shoulders” pattern with the prior high of 1597 spx then being the “left shoulder”. That leaves the rally up for the wave 2 to make the top of the “right shoulder”. In this case I think it will end around Legatus but it won’t go up as much as people expect.
The reasoning behind this is the fact that everyone will see the H&S pattern and will be expecting a high close to the 1597 left shoulder. The best way to trick the bulls that are long and the bears waiting around 1597 is to fail to even get close to that level again. The bears will be forced to chase it down as wave 3 starts and the bulls won’t believe their eyes when it starts down hard again.
So if we assume that the bottom of the first wave is around the most recent low of 1536 then the bounce back up for wave 2 (and the right shoulder) should stop at a lower Fibonacci level like the 38.2% or the 50%, but not the typical past retracements that are almost 100%.
In order for wave 3’s to start and have any real scare effect they are usually preceded by a weak wave 2 that lures in dip buying bulls and catches the bears asleep. This is why I’m not expecting too much on the wave 2 up. But for now lets focus on catching the top of this move so we can be short on the wave 1 down.
GOLD Support and Resistance levels: http://niftychartsandpatterns.blogspot.in/2013/04/gold-support-and-resistance-levels.html
Death Cross of EURUSD: http://niftychartsandpatterns.blogspot.in/2013/04/death-cross-of-eurusd.html
ES Chart analysis: http://niftychartsandpatterns.blogspot.in/2013/04/es-support-levels_29.html
UNITED States Oil chart analysis: http://niftychartsandpatterns.blogspot.in/2013/04/united-states-oil-chart-analysis.html
IWM Weekend update: http://niftychartsandpatterns.blogspot.in/2013/04/iwm-weekend-update_27.html
APPLE Inside day and Positive Divergence: http://niftychartsandpatterns.blogspot.in/2013/04/apple-inside-day-and-positive-divergence.html