Raptor, I think the odds now favor a move above 10k. (We could see that by 9:35 AM.)
I am now working with the assumption that the entire move up from 9106.54 is an A-B-C correction in the INDU and SPX.
Wave A from 9106.54 to 9992.53 was a move of 885.99 dow points.
Wave B from 9992.53 to 9375.72 was 616.81 points.
Wave C from 9375.72?
We seem to be concluding sub-wave 3 of 5 of C, with 4 and 5 of C to follow (I just don't see any way to view this as 5 waves completed). If C ends up equal to A, then we could see 10,261.71. This is consistent with a retest of the 10,250-10,300 resistance. Hopefully, this is a worst case.
Another way to look at it is to draw the trendlines, with one line touching the two bottoms and 9106 and 9375, and the upper line touching the two most recent highs of 9960 and 9992. We get a nice rising (bearish) wedge which seems now to run somewhere between 10,000 and 10,100.
Finally, if the SPX is also to complete an A-B-C, we need to see about 32 more points on the SPX, which would translate into at least another 200 point gain in the INDU (on a %age basis).
All of this is conjecture, of course, but I have to believe, absent a major piece of bad news in the morning, there will be follow-through.
I get the feeling that this move will fry a lot of the weaker shorts (shorts with staying power should be ok). I don't know about the options holders yet. We will have to get one very fast move down to make those April out-of-the-money options pay off. We will need to see something on par with the hard move down in mid-March, and it will have to start very soon. |
