Saturday, May 22, 2010

Nasdaq 100 - Daily Trend Model

Below is the Nasdaq 100 Daily Trend Model with an Elliott Wave count that portends deeper, much deeper declines in the offing:

This trend model can be used to trade QQQQ options and if you are so inclined, gives a "worst-case"scenario for analyzing "best case" scenarios for gains in puts.  The wave count is suggesting another 7-17% decline in store for the index.  Extrapolating that to the QQQQ would suggest a drop to between 41-37 from its current level of 44.84.  Let's take a look at the QQQQ chart and see how close it comes:

Wave 5 Target = 35-40

In conclusion, while the Daily Trend Model is SHORT, it doesn't give guidance as to how far or for how long the market will decline.  EW is a imperfect science, but it does provide some structure for projections and in this case, is suggesting a decline taking the QQQQ to levels between 35-41.  With four weeks to go to June expiration, there are a lot of strikes in the QQQQ puts that will thrive under the auspices of these projections.


Disclaimer:  Do you really know me?  Do you know what I may be on, or have been smoking, or drinking, or eating, or dropping?  Have you ever taken window pane acid?  Have you ever eaten really potent brownies?  Or, maybe he's just too old for that stuff.  See, now he's talking in the first person.  Or is it second?  That should cover it.


Anonymous said...

Your disclaimer is a gem. Better copyright that ASAP.
Thanks for the terrific work.

Mr. Peanut said...

My, my, that disclaimer is a riot! Enjoy your blog very much.

Anonymous said...

* 05/22/2010 - 158 dead in AIR INDIA plane crash... [RIP + + + ]

The Operators arrange these purportedly to feed Marduk, patron of their Bohemian Grove. This displaces the teleology imposed by both market and economic cycles. Displaces only, for eventually the cycles reassert themselves.

E.g., April 16, 2007 the Virginia Tech massacre occurred. The US stock market had been ripe for shorting since late that February with a double top in place that April. SP500 chart @ VTech

E.g., Nov 5, 2009 the Ft. Hood shooting by traitor. The US stock market had also a double top and seasonality going against it, but then broke out higher. SP500 chart @ Ft. Hood

Eg., The April 10, 2010 Polish air crash in Russia lent the market a couple weeks of a distribution, rather than simple blowoff -top.
SP500 chart @ Polish

(there are other examples). Later examples are getting less umph than earlier ones. This is due to time compression heading into 2012, the increasing voraciousness of the the chronophage.

* the drop in QQQQ might be postponed about two weeks ???

The Corpus Clock & Chronophage outside of the Taylor Library at Corpus Christi College, Cambridge, England, officially unveiled to the public on 19 September 2008 by Cambridge physicist Stephen Hawking.

Pink Floyd - Another Brick in the Wall ... if you cannot think, then you're walled in the matrix.

Anonymous said...

Actually, the last couple of lines are in the third person. LOL Fortunately your numbers skills are lots better where it counts, on the charts.

Anonymous said...

You Must watch that video about the clock. fantastic.