Possible scenarios for the "LET'S GET RICH BABY" summer rally.
"up!"
Finally, we're getting out of this complicated freaking Wave 2. The wave 1 of the new bull market was pretty simple, 5 waves up, from 1619 to 2233, Easy to understand, easy to trade with. Than came wave 2, an incredibly complicated expanded flat that everyone in the planet swore was head and shoulders formation. Expanded flat: 3 waves down (2233 to 2057), 3 waves up (2057 to 2328), 5 waves down (2328 to 2077, 2077 to 2264, 2264 to 1974, 1974 to 2180, 2180 to 1934)...As you can see...IT WASN'T!! It's an expanded flat..
No one in the entire SI web site believed it or understood it, so they continued to short and short and short. This has ALL the makings of a monster 2 month wave 3 rally. If the first wave was 700+ points than this rally could be 1100-1900 points (1.618 X 700, or 2.618 X 700). Those are the measurements of a wave 3, and wave 3's are the most insane rallies out of any rallies from any wave. They last the longest, and the trend is unmistakeable. Wave 3's arise out of the current conditions: Total fear that the lows won't hold, very high short interest, high put call ratio (VIX hit 29.25 last week), and denial, and "cash on the sidelines". The rush to not miss the bottom causes massive eruptions to the upside.
I'm looking at wireless stocks like QCOM RFMD MOT NOK, maybe storage if the market reacts kindly to EMLX and BRCD earnings, the networking sector has bottomed - FDRY EXTR PMCS AMCC BRCM CSCO. Upside shockers like VRSN and PSFT, Still favoring RFMD heavily, the chart is the most beautiful chart I've seen, and has a shot at the 48-51 range the next month or two. |
