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Monday, March 16, 2009

NASDAQ and Wave 5(5) to New Lows

The NASDAQ violated its accepted wave 1 (5) low today. That would imply that there will be no wave 5(5) because the count cannot be correct. However if we relabel the NASDAQ, then the problem is solved. I provided a chart.

First things first: If the market breeches today's highs in any way, then it is likely that the count is indeed wrong and wave (5), or Primary wave 1, low is in. That means 666 will hold for a market low for at least a few months or likely many more. It doesn't mean a deep retrace cannot happen, but if a deep retrace is to happen, it would likely happen soon (as in now). Down volume today was pretty good at least from a 10 minute candlestick view on the S&P minis futures.
There are several things I am keeping an eye on and I have blogged on these items recently:
1. The Banking Index chart. I have it in a complex extended wave (3) and that means it should make new lows. This will lead the market down.
2. The VIX. I look for it to continue climbing toward 50+. A breech of 40 will be bad for the bear case.
3. The CPC put/call ratio. I look for it to start heading up toward a consistent put-heavy ratio leading the markets down.
4. The wave structure. 5 wave inpulses down, 3 wave structures up. I look for volume up or down to tell the story. I look for channeling and Fibonnaci expansions of any wave 3's to 1.618 or more.
5. The NASDAQ. I have quietly charted many big tech and I speculate they may break down hard. Afterall, why are the high beta stocks worth owning? Do they give dividends? Are we not in a severe recession? Who said Tech was good to hold during this time? I think the QQQQ's are due to get ROCKED downward. They have been "hanging up". The new quarter will be just the spot they drop off a cliff (April...)
6. The Weekly RSI was kneecapped at the main RSI Primary wave 1 down trendline.
Obviously all these items went for the "bear case" today. I have put all these charts on my public chartlist so anyone can monitor these things. Price of course is what matters in the end.

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