Possible scenarios for tomorrow (Elliott Wave):
I've been analyzing the COMP charts since the bounce to 2187, and now things make a little more sense....
The 10-14 point positive NASDAQ Futures makes sense...
It's retracing 2068 to 2043 (about .382 to .500), which means we might open at 2058-60 (right shoulder of an hourly head and shoulders), and than FLLUUUSSSH, a possible 80-85 point Wave 5 down.
Not every new rally starts with a gap down, than huge jump.
There are A-B-C corrective waves that have ended late in the day, when everyone was ready to throw in the towel, and do. Gotta count the waves more carefully. Recall the rally that started the day of the last rate cut....pushed down most of the day, rallied, than plummeted very late in the day, and exploded the next day.
I believe tomorrow could be the final big flush, and the levels to watch very carefully are 2000 and 1974.
The late day rally may not be a dead cat bounce (it could be a massive bounce!), no matter how feeble or large it may be. There's a good chance that that would be the start of the magnificent Wave 3.
But those two levels must be watched very very carefully.
If we drift down beyond 1974 (.500), the next level would be 1890, but I don't expect that (.618). If we get to 1974 tommorow, and bounce off of it with reasonable authority (like 50-100 pts), I'm long. If there's a bounce (wave 1), than a sell off that doesn't break a new low (wave 2), that would be a very bullish sign. But if there is a rally and it breaks a new low on the profit taking wave, batten down the hatches...we be goin' doooown. What has to happen, is a test of 1973-1974, a bounce, than on the Wave 2, or profit taking wave, it MUST NOT exceed and break below the level where it started. If there's a bounce at 1974, and it gets undercut, look out below.
I'm willing to take a long position at 1974-2000.
Looking at the wave count, this is likely the last selling wave of the A-B-C corrective zigzag wave. We got a couple extended waves, one was a 3 and one was a 5. We might get another extended wave drop, I'm guessing during the morning.
I'm looking at BRCD at 35.80, QLGC at 47.60, and EMLX at 30.25. Buying max margin, and ain't looking back. Also thinking about July 50 calls (maybe even July 70) on BRCD.
I hope the flush tanks the premiums on BRCD for July.
I'm short CIEN and PMCS, both with broken charts until the test of 1974-2000. At that point, I'm gonna cover and go long. Storage companies, EMLX BRCD QLGC and STOR are the way to go, and possibly, if you're a little more on the mo-no side, the online travel sites like PCLN and EXPE. Those tech companies have the best charts.
Bottom line: Gotta watch those two levels carefully.
1973-1974 and 2000. If we get a good bounce from those levels, the huge summer rally shall begin.
The Wave 1 rally was 709 points, and this rally might be 1100-1300 points (1.618/1.75 X 709). The big bad booty daddy we've been waiting for.
-Ted |
