gem-x's Elliott Wave forecast for Wed. Jan 16, 2002..
Looks like tomorrow (obviously, if you saw the NASDAQ Futures) is going to be a gap down, specifically a 3-4-5 during expiration week...there's a good chance that the dip is going to be bought and the market is going to rally.
Whenever there's a gap down on a 3-4-5 on a 5th wave down, the best time to decide to jump in is around 9:50AM and 10:00AM...has the market reversed significantly off those lows? And especially during the 10:00AM to 10:40AM time frame..if there's a rally off the lows, do the indexes trade at the high end of the range during this time period?
Usually, from past experience, if the indexes rally, turn positive and hold their highs until 10:40 to 11AM, the market will continue to rally until the close.
This would be 5 waves down from the high on the NASDAQ of 2099 and the high of the DOW at 10298 (or bigcharts.com says 10345, but I don't recall seeing the DOW get that high), and there should be a rally of at least .382-.618 the length of the entire wave down.
The big question is....is the 1-2-3-4-5 on all three indexes from a Wave A of a zigzag or a Wave C of an expanded flat?
If it's a Wave A of a zigzag, the indexes should retrace .382-.618 of the previous 4 day's losses, but if it's Wave C of an expanded flat, the rally could break new highs. I sure hope it's a 5 wave down move on an expanded flat..
I think it's a Wave A of a zigzag, and the rally, that should last 1/2 the time of the down wave (4 days on the down wave) until Thursday, I'd be selling into, unless there's a strong volume break of the .618 retrace, with a great candle like a bullish engulfer..
The NASDAQ, depending on where it gaps down to tomorrow, would get to around 2020-2050 on a Wave B.
Either way, I'm going to be selling on a 5 wave move up from the lows tomorrow if I initiate a position in the morning, just to be sure that the retracement of that move doesn't turn into a brutal wave C.
I'm reading this correction as a zigzag dropping to test the December lows, 9700 on the DOW, 1918 on the NASDAQ and 1117 on the SPX.
This would be a full retracement of the move from late October to 2099 in January.
On a rally I'm going to be watching the following:
GNSS and NVDA..
NVDA had a heavy volume reversal today, and could continue to the upper end of it's Bollinger band, to around 71-72 (or higher).
GNSS had a killer morning star hammer, with a very long tail, tiny white body, that closed at the top of it's intraday range...GNSS could rally hard into earnings, but if I were to get into it, I'd sell the during the last day of it's run up to earnings...the run up could be a 5 of 5...
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