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Wednesday, April 29, 2009

The Counts are Difficult. This is P2

I 'll just say that Elliott Wave International just issued an update that the whole month of April was a correction in the form of running triangle. I have suggested several times over the last few updates (indeed my last night's update on the DOW seemed to be mirrored in EWI's update tonight verbatim - I think they read my blog) that these appear to be triangle waves and indeed I have offered a few variations on what that triangle could be.

The yeast keeps rising.

Permabears want that nice pullback. They want affirmation that they aren't somehow "screwy in the head". There is no way to do a 3 day settlement short swing trade as the market has not had 3 down days in a row since the 666 low.

If April was a big triangle, then the next moves are upwards and onwards to 900 and above. Indeed the SPX was only 18 points shy of 900 and once 875 breaks up for good, whats to stop a run to 950-960 and the 200DMA? Someone said the 200DMA just keeps acting like a magnet on the markets. I agree, but even I expected a brief moment of pullback, sprinkled with a bit of doubt, of fear. Will it come? or will it only come after the 200DMA is hit?

Regardless I am 80% long. So I am profiting nicely and won't think of selling until the 200DMA on the SPX is hit. I have a couple of short term shorts but I'm thinking of bailing after doubling up today on QID. I bailed on FAZ at $9. Small profit but the market wasn't behaving correctly so I dumped the poison. QID is more tamer.

The short term waves are just nothing but higher highs even the damn triangle was a "running" type which means higher triangle waves to begin with.

Overall I'll wait til Monday to completely jump on the bull bandwagon. I want to see what a new month brings and if Friday will be bullish or bearish.

A break above today's high of 882 confirms EWI's count. A break below 845 confirms a bearish pullback. How deep and how far I don;t have a good read just yet. Just educated guesses.

Its a difficult count on the short term. But stepping back, I have no doubt this is a Primary wave 2 and the ultimate targets are much higher and that all the 200DMA's will be hit. The SPX 200DMA is residing around 969 at the moment. It is still dropping which means this is still a bear market.

I will however wait until May comes. No need to get long on the last day of the month.


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