Thursday, December 18, 2008

Wave 5

As the chart below illustrates, time is running out on the Wave 4 corrective rally. At it's completion, Wave 5 will commence with a target at or below the indicated support level 700 on the SPX.



What I am looking for is some indication that Wave 5 has started. The first clue will be prices dropping down to break the Wave 4 regression channels. Another trigger will be a drop below the Wave B low late last week and a third trigger will be a False Bar Stochastic cross-over below the 75 level. Any or all of these technical patterns will suggest Wave 5 lower has begun with an initial target of SPX 700.

A

7 comments:

Anonymous said...

thx Allan for enlighting us at all times
my concerns are now totally focused on nnvc regardless market direction.Now, if any explosion likely to happen b4 christmas what would be its preliminary utmost target price?
Sorry Allan for this question but i'm totally confused in figures sometime i say it will open above all times high lets say at $2 then expands to $5 or$10 some say $80 others.....What is the utmost initial expansion?
thx allan
nnvc addict

Allan said...

You're asking me to guess what price will be in four days. If there is some news, it will depend on the nature of the news, but certainly the old high at 3.75 would come into focus. No news? Expect current price range to remain in place. I would hope your aspirations for this stock are longer term then, "b4 Christmas".

Anonymous said...

Thx for yr prompt reply
Aspirations are more than "b4 christmas" by far. After all i call it its Allan's pick and would likely go within its course till end.

Anonymous said...

Anonymous, I mean you no disrespect, but you should consider typing out your sentence fully using proper grammar. Your presentation leaves a bad taste, regardless of how good your intentions are.

Anonymous said...

Allan:

Can we consider this the time to go all in short"? I've been looking to buy 800-1100 SPX puts at a graduated series of strike prices to add to the 200 puts I already own.

If you are RIGHT and it does, look for me to hit the "Donate" key on your blog in a big way.

What are you advising? I agree that the market is going down.

This GET program is looking interesting as well. I'm going to check it out.

Leonidas
Southern Greece

Allan said...

Leonidas: As much as I would like that Donate link being hit, I can't say that Wave 5 has started, not quite yet. Nonetheless, as long as those puts have some time on them, starting to ease in now would be my preferred way to establish a position.

I don't know how closely you monitor the market and look at charts, I do it all day every day so I will see Wave 5 coming pretty much real time. Any day now, the market can gap down and never look back. But since there is open a possibility that another 50-75 S&P points are necessary on the upside before that happens, I would still wait for more solid evidence we are starting that long descent to new lows and/or easing in now in anticipation of that move lower, but not all in, not yet, anyway.

A

Anonymous said...

Ahh Allan:

I must say, after following and posting on your blog for a few years now, and having made several million USD along the way (about 8.2 actually), and after some reflection, I am now quite certain that you are being smiled upon by the Goddess:

Demeter

I don't know what you have done to curry her favour but you certainly have her (the Goddess of The Harvest and Bounty) in your bedroom or at least trading area.

I will yet again follow your (amd her) sage advice.

Leonidas
Southern Greece