At the end of my post yesterday I mentioned that if we broke yesterday's lows it would be look out below. Boy was it ever and more. We gapped down big and never looked back. With ES 852 out of the way I think it is safe to say that wave 4 is over and we are nearing the end of wave 1 of 5. From the looks of things it doesn't look over. We can either move up from here or move down slightly from here but we should manage some choppiness up to the 38.2% retrace level before we head down and test ES 815 to finish off w1. That should give us some nice divergences, because right now, I'm not seeing anything significant.
Here are updated 15min and 60 min charts with my forecast on how we move from here. On the move up to ES 890 I'll be loading the boat full of high beta puts (i.e. aapl, gs, abx). Should be a good chance to make 10x on your money.
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High beta puts? Can you please explain how you would play them (month strike etc) IT is much appreciated.
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Hi Rich,
ReplyDeleteI'm wondering if you have any charts from the peak of beginning of wave 1 in 2007. While we were falling I neglected to save those details and I would now like to re-create a detailed count of the market up to this point which I believe is wave 4 of 1.
Thanks,
Bob
By the way good work and a great blog!
Sanjay,
ReplyDeleteHere's what I will be looking for. 1st a solid impulse count down. I'm sorry I haven't posted Thursday or Friday, but I was just too wiped out at the end of the day (teething 1yr old!). Anyway, I'll show in my updated charts tomorrow that I haven't seen a completed w1 down. Once I have a good count, then I'll be watching the retrace. It should be solid retest of the highs (maybe even greater than at 78.6%), but once we get to the 61.8% retracement, then I'll start building small positions from there and add to them if we get to 78.6% (possibly half Feb09 and half Mar09 expirations) in my target companies: AAPL, RIMM, GS, and ABX are ones I like to play. I'll probably add some QQQQ, IWM, and XLF index puts. If we were to retrace 100%, then I would immediately exit 100% of all the positions. I would use deep out of the money options for Mar09 and out of the money for Feb09. Hope that helps and good luck. Remember that you can lose 100% of your money so never risk more than you can lose.
Bob, what timeframe are you looking for? I have my daily chart posted on the sidebar.
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