Today's down moved traced out a perfect impulse wave (see chart above). Since we hit our minimum retrace level yesterday (50%), that means that the odds that the party is over just got bumped up to 90%+. I only hope that the end was at the close today, because I have a lot puts to buy and I want them as cheap as I can get them. We should all pray for decent GDP numbers, because we don't want to spook the bulls before the market opens tomorrow.
At this point it important to step back and look at the big picture. We should get a terminal sell off because we never really got one with the end of w3. This has to be bad to build the base for a multi-month bull market.
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Great Post.
ReplyDeleteHi. Thanks for the post.
ReplyDeleteWhat will it take to be certain that this is the start of 3 down? Any targets?
thanks,
Joe
Thank you for your excellent posts. I have been studying EWT since it was one of the few systems to predict the October crash accurately. Your blog has been very helpful in this regard (especially in recent days!).
ReplyDeleteBetween yesterday and today, I've been loading up on puts across these strike prices (870,800,750,700). Today was a good day for my account. However, I don't want to make the same mistake I made with the recent wave 1 move by taking my profits too early.
I intend to ride this sucker down to the 700's (unless we break 910).
Quick question: If wave 3's are approx. 1.618 times the length of wave 1's (944-805), can we guess that this leg will take us to around 650 (876-225)? I have my own buy signals to rely on, but I'm looking for a decent place to take profits.
Thank you again for your excellent blog.
JT - We'll know for sure this is w3 when we break 800.
ReplyDeletegautsid - there is no definitive relationship between w3 and w1. Instead, I look for a relationship between w5 and w1. Since we're now in w5, if w1 and w5 are equal, that would put us in the neighborhood of 650.
The other thing I would say is we should get a terminal selloff (capitulation) to end this. If we have a day like that, I would look at taking at least half profits at the close. If it happens south of 650, then I would take 100% profits and probably look at going long.
First off, is there a specific nomenclature to denote minor waves from primary waves from other smaller waves?
ReplyDeleteBarring a freakishly long w4, we're now in w5, and likely minor wave 3 in w5.
I may be confused, but I think you're comparing the end of the primary wave 5 to the end of primary wave 1. Before the end of primary wave 5, we should have the rally of minor wave 4, and then the final collapse of minor wave 5 in primary 5. I believe that this is the long-term bottom you have been referring to.
Just reviewing my notes, the only concrete rule about wave 3 is that it can't be the shortest impulse wave. Since wave 1 was 140 points, that would mean wave 3 should definitely go past 740. Correct?
Apologies for the long-windedness; I'm thinking out loud here and am still a beginner on EWT. Also, I suspect the next few weeks should give me a lot to chew over.
Again, thanks for sharing your knowledge.
gautsid,
ReplyDeleteYou have it right. I'm talking about intermediate wave 5 and intermediate wave 1 being equal (see my longterm view EW chart). After this wave, we will be done with primary wave 1 (my best guess) or wave A (some EWavers think it will be a lesser degree correction).
Just don't let the subdivisions of wave 3 get you worried. It should be an opportunity to add to shorts on the way down.
Also, my longterm bottom (that you refer to) will likely only be 6-10 months. Then we will hit primary wave 3, which will provide some massive stock market losses over a period of years.
Hello Rich. You said in your last reply - "Also, my longterm bottom (that you refer to) will likely only be 6-10 months. Then we will hit primary wave 3, which will provide some massive stock market losses over a period of years."
ReplyDeleteSo you think at some point you could provide a long-term chart of what you are thinking?
Thanks,
Joe
JT, I actually have a picture on my sidebar called the Really Big Picture. That is where you can see my forecast.
ReplyDelete