Update For Wednesday, May 30
Congratulations to those who sold on Friday in anticipation
of our call for hard down today. The NASDAQ had one of its
nicest down days in quite a while. The only large caps that
held up were AMGN, ERICY, WCOM, and CMCSK. Storage was
hit real hard, lead by the EMC news I presume. (The EMC
breakdown late last week was featured in last night's chart
update.)
Summary: Perhaps one more small down leg tomorrow, but the
next move of note will be an ugly, overlapping 4 wave that
last for days.
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Tonight's quote of the day, a new feature of the update, is
from Bobcor:
"Witness the power of a fully operational wave 3."
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Non-tech did not participate with the vigor we had hoped.
XMI, which I follow as a proxy for non-tech blue chip, was
green all day.
What's ahead for the next few days? In a word, jello. We
may well see one more down tomorrow to finish our 3 wave,
but that will be the end of it for a few days as we head
into a longer correction of today's decline -- a wave 4.
The coming correction should be ugly and overlapping. if it
is not, then it will be a clue to me that we have something
more than a 4 wave on our hands.
Recall that we think we are in a 'c' down that could well
last another week or three, and after that, we think that
tech turns up for a final rally to new intermediate highs
before a larger correction.
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Detailed Elliott Notes:
There is no way to know if we are going to get a wave 5
down to go with today's 3. We have seen a nearly complete
5-3-5 pattern. Given how complex the correcive structure
has been these last few weeks, maybe we'll get a strong
rally here that violates what a wave 4 should do and we'll
look back and realize that our 5-3-5 leg was only zigzag,
the first leg in a combination correction. However, for
now, the odds favour something simpler, which is that we
see a 4 correction this week and then anotehr down leg. |
