Vitas,
No problem my man. It's this simple.... From the 10/8/98 lows, a large scale 5 wave move up unfolded that completed on 4/13/99. This 5 wave move is the first wave in a series of 5 larger waves that will move the market higher during the coming months and years. Once this 1st wave completed on 4/13, the wave 2 correction began.
Looking at the SPX, we had the hard snap down to the low 1300's for Wave A of 2, then B of 2 rallied back up to the highs, even surpassing them, and completed on 5/13 at 1376. Then we had a clear cut 5 wave sell off for Wave C, with wave 3 setting the low point in the SPX at 1277 and change, then a rally back up to the low 1330's for wave 4, then the selloff into Friday a week ago's lows that ended the 5th wave of C, and the Corrective process for this sizeable wave 2.
Wave 3 sprang to life from There, and has already rallied 4 to 5 % on most indices. Wave 3's can travel as much as 7 X the size of wave 1, which was in this case, 1367 - 922 = 445 S&P points. So the sky truly is the limit, and I can't reiterate enough what an important long term buying opportunity this is... Right here.. Right Now. There'll never be a better time to establish long term core long positions than the coming few weeks.
Our maximize downside potential from here is Friday a week ago's lows, or about 1290 SPX/ 10420 dow, and that's if the market decides to do a 100% retracement of these small up waves thus far, an unlikely scenario (50% is most common, with anything over 80% rare).
Regards,
David |
