gem-x's Elliott Wave Forecast for Jan 25. '02....
That ugly looking shooting star on the NASDAQ today looks like a precursor for another (if not the last before a bigger rally) wave down....there's 2-3 more days before the 34th day of this correction completes, and we'll find out if this move down was a textbook expanded flat, or if it's going to be an A-Wave 5 wave move down of a larger correction.
But a shooting star in the past few months on the NASDAQ has followed with a big red candle down.....shooting stars can cause nasty one day drops the following day, and at times the dreaded island reversal.
There's a large gap that's gonna fill tomorrow, which would mean a retracement at least, of the entire wave up from 1879 to 1959.
.382 is 1929, .500 is 1919 , .618 is 1908 and .78 is 1896.....a break of 1908/1896 practically guarantees a drop to 1859/1853/1826
The question is, was 2058 to 1879 the entire wave 3 down, or was 2099 to 1879 5 waves down? If 2058 to 1879 was Wave 3 down, and 1879 to 1959 was wave 4 up, the next target could be that 1826 level.... .618 of wave 1 + wave 3 (2099 to 1879) would target 1823-1826 on the NASDAQ, which is the .382 Fibonacci retracement level. But if 2099 to 1879 was 5 waves down, than the move we've been seeing is Wave 1. But I'm more in the idea that 2058 to 1879 was wave 3 down.
It's very very iffy to take a serious position right now.
I went flat for the time being....took a little profit on that EBAY trade, (sold it for about 60.88)....EBAY had a shooting star, just like the NASDAQ.
I don't want to take a serious position until this correction runs it's course....mostly because it's a bad idea to short a 5th wave down, as it's a bad idea to go gung ho long unless the correction pattern becomes completely clear.
Basically, why go after a point or two, when you can potentially nail those beefy 10-15 point gains on a legit rally?
I'm watching QLGC closely, because the correction it's been in looks like a textbook flat. I'd love to see it drop below 45, but would be a little cautious if it broke 42.30-42.76. QLGC is a great stock to trade during bullish waves, because it gets mega-pointage. There are days when a strong rally could lift it 6-7 points in one day, and during October-Nov, it was absolutely my #1 favorite stock to trade. I'd prefer the technicals remain intact during it's drop, specifically the MACD....If QLGC drops to 43-45, and the MACD is much higher than it was when it last hit that level, that's a good divergence.
One thing that I've been looking at is the number of puts vs. calls on the QQQ's for Feb. If you look at the open interest.
For QQQ 35's, it's about 66,000 puts and 2500 calls, for 36's, it's 27,000 puts and 10,000 calls, for 37's, it's 55,000 puts and 22,000 calls (whoah), for 38's, 64,000 puts, 14,000 calls (whoooah), and from there from 39-42, it's dead even. If the NASDAQ rallies, there's a clear and easy path straight through 42 on the QQQ's. A ton of big players are expecting a large drop, and as a contrarion indicator, this is bullish.
So if this market turns on a dime and rallies hard, all those big guys leaning the wrong way would have to close those puppies fast, because expiration on Feb. is early...on the 15th of the month. Feb 1 is on a Friday, so that kinda screws them...
I'm being very patient right now, but I want to see a legit rally before jumping in....or like Maria Bartiromo would say "jump in with both feet"...man, I love her...
I created a new message board on Silicon Investor:
Check it out, and bookmark it...I'll be posting updates there too..
Subject 51657
DISCLAIMER:
GemX does not warrant the completeness or accuracy of the information contained on these pages/e-mails, but provides it for whatever value our members and guests may find in it.
Subject 51336
gem-x's incredibly accurate Elliott Wave forecasts
If you want to join the free e-mail list, (sent every day, during the day when I start to notice a predictable wave...) e-mail me at gemdemars@aol.com. It's totally free. If you're a short OR long, these Elliott Wave forecasts are great. |
