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Wednesday, April 29, 2009

This Is the Bullish Count


I haven't fit anything better together at the moment. What seems somewhat certain is that a diagonal pattern has played out from 825 to 882. This chart shows it as a leading (which is bullish) diagonal in a first wave position. These usally retrace somewhat, at least half so a dip into the lower 850's, high 840's could be expected. So after that retrace, the market will bust upwards in the next phase of the rally, likely onward to meet the 200DMA's in the mid 900's.
Perhaps these humps are series of 1's and 2's, but again, I dunno. The emini chart I showed certainly looks like ABCs using all hours...and that means a diagonal of some sort.
I'm betting its an ending diagonal.
This count has some flaws. The X wave seems short for one thing.

9 comments:

  1. Nice work Dan, I totally agree with this chart unless we close bellow 845. Today almost reach my 1st target 890, I took small position in FAZ today as i will start accumulating all the way to 925 if we get there.
    TD

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  2. Dan,

    Are you still holding your FAZ bought at 8.12?

    Thanks,

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  3. Nope I bailed on FAZ a few days ago when the market refused to selloff. I profited though. I doubled up on QID today near the high though and am still a bit underwater though nothing drastic.

    However I am thinking of just selling first opportunity and cut my shorts loose.

    I have a small bit of SDS as downside protection in my 401K which is 80% long since sub 700 SPX. I may bail on the downside protection too.

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  4. Thanks Dan. Hopefully I could bail my shorts around 850 area.

    Best,

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  5. Dan, at what point will you bail out on the downside protection.

    TD

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  6. Tomorrow, the weekly Jobless claims will be announced at 8:30, along with the PCE and Consumer spending. Then the Chicago PMI at 9:45.
    After the market appeared to have ended Major wave A at SPX 876 on April 17th, it sold off to SPX 827 by the 21st. While we were expecting a rally off that low, we hadn't expected the rally to last this long, nor make new highs. Nonetheless, the wave structure of this B wave rally appears to have formed another triangle. A contracting one in the cash market and an expanding one in the futures market. Reviewing the historical Primary B waves we noted a relationship in time between the preceeding A wave and the B wave. In 1929 the A wave took 16 days and the B wave 10 days. In 1938 the A wave took 27 days and the B wave 13 days. Thus far in 2009, the A wave took 29 days and the B wave has taken 8 days. This suggests when this triangle completes we should get another down wave exceeding the recent SPX 827 low. Based on this analysis and the time factor we are upgrading the recent low to Intermediate wave A and this rally to Intermediate wave B. Intermediate wave C should follow to complete Major wave B. This also suggests a low some time in the latter part of next week. Best to your trading!

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  7. This is bid mad market if you trade it at daily, I think. I think Dan is going to right with bullish count, bearish SPX 875 is far too easy in here even it´s still behaves every week and is being sold. This might come as difficult, QQQQ with SMA-200 line as immediate resistance, might require a dramatically more buying power to push it over.

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  8. i posted a chart on stocktock showing possible scenario to 943, however I have count at intermediate 4

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  9. I agree with you on this one Dano. On your primary count and you alternative. As I posted on my blog tonight, I am telling bears don't double up or go all in hear. Wait for confirmation of a bigger move down after we go down below the 20 day MA in the 845 range or lower before moving more in. I think you have the primary count right on but your alternate is what people need to watch out for.

    But last night you were predicting a bigger move up before a retrace. So what happened with that scenario?

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