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Monday, May 4, 2009

Elliott Waves Can Save You Dough

My chart from Friday

Sometimes EW's are great predictors of things. I covered QID early today for minimal damage and my 15% SDS hedge in my long 401K. I didn't buy any more longs at the moment other than my 401K mutual fund holdings I've had since early March.
However I knew enough not to try and short things. I have no short plays at the moment although I think the market is heading back to 896 support so its not a bad spot to try and pick off a scalp. However your in the mist of a wave [iii] and its gonna hit the "third of a third" soon so that's playing with fire.
But knowing this is a P2 has saved me a lot of $$ since my permabear status always tends to pick spots to short rather than buy longs (other than my oft-mentioned bulky 401K mutual fund longs). But that 200DMA is a magnet. The NASDAQ hit its 200DMA today.
Also the daily RSI is finally breaking upward. I think it hits at least 70 before C wave tops out.


  1. Hey Dan, am i reading your bank charts correct and you see 46-51 on the bkx now that it broke out? And this would/may mark the top of p2? Thanks.

  2. CRS its just a guess with whats going to happen to the banking index. But yeah more upside following the market in general. New highs? This I am not sure.

  3. Great Job - Dan! Thought the RSI has aready arrived at above 70 as shown in your chart, is it? If so, it should put SPX close to the top (if not already at the top) of C?

    Thanks! ARJ

  4. I meant 70 on the daily (not shown) sorry for the confusion