The market surpassed 666 in no time at all and closed at the high of the day. All we need now is follow through on Monday. Watch 676, 670, and 667. Near term up target is 687. Any EW guy out there and shall we say wave5 completed from Oct11? Now corrective abc waves??
2c
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Hi 2cents, I subscribed the EWI report for some time, and learned some EW principles and etc.. My experience is that it is working until it stops. There always another explanation, or another subdivision to be exact. In any case, from Oct 10 high, you can say the wave 5 is complete, although the wave 4 is not classic, and marginally into wave 1's territory (intraday, here could be a problem). Wave 5 is usually a fib number of wave 1 (0.618, 1.618, 2.618 etc.). Wave one is approx. 87 (1576 to 1489), wave 5 is so far 77 (1492-1415). Furthermore, wave 2 is zigzag, and wave 4 could be a triangle or flat. So far, if that is a wave 4, it is not typical.
My interpretation is that we are still in wave 3 down, and we should get to 1400 for a bounce, or to 1370 (aug low), for a bounce for wave 4. the low will be in around 1300.
NDX is at critical point, by the rule of measured move, it fulfills the criteria. If this is correction here, NDX should move up. I doubt this is the case. Simply, because, SPX, OEX, RUT, DJX all move more downward than the measured symmetry. NDX should follow all the others. In fact, RUT has already tested AUG low, and moved up.
The reason I got some C calls and IWM calls on Wed, was that BKX and RUT didn't make new low, although the market was terrifying, suggesting a temp. halt of the trend for a bounce. As I said, I got rid of my calls for some profit, and got some puts again.
Hope you doing well.
p
Hi PT,
Thanks for your thoughts. I look into the weekly and daily charts and here's what I found. But using OEX.
Weekly it is still in wave3 down, ur correct. From Oct11, wave1(735-696)=39, wave2(726-696)=30, wave3(726-664)=62, and 62/39=1.6.
and using spx wave1(1576-1490)=86, wave2(1552-1490)=63, wave3(1552-1416)=137 and 137/63=1.6
and using OEX daily. wave1(735-696)=39, wave2(726-696)=30, wave3(726-672)=54, wave4(696-672)=24, wave5(696-664)=32, and 54/39=1.38 and 32/39=0.62
Looking at all these would you not say we are due for a bounce??In addition, looking at the last two corrections, there were never wave3let alone wave5
2c
I went back to the Frost and Prechter book to make sure that what I said is correct. Wave 3 is the longest, and it could go 1.6 or more often 2.618 of wave 1. Yes, we are oversold, and we may have a bounce. We had a rally on Friday, and RUT got to the resistance and turned down again. SPX 1440 is a critical area. If we close green on Tue., I think the rally will last longer. My guess is we are going down on Monday, and the downtrend will be kept intact. Gann trading says that in the downtrend, the rally only lasts 1-2 days. If rally lasts more than 2 trading days, change of trend could occur, at least temply. If you look back for this down turn, it is really no good 2 day rally on the closing basis.
This is another problem that I feel that this time it may not be just a correction. That is at least what I am trading on.
p
by the way, if we hold the low last week, and we may have a double bottom, and rally from here till the year end. It is a real possibility. If we close in red on Monday, it is less likely.
p
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