gem-x's Elliott Wave Forecast: Feb 1, '02
The DOW, NYSE, and SPX all completed picture perfect morning star reversals today....big red candle down on the first day, strong white hammer with a long tail and small body on the second day, and a fat white upward candle on the third day... the NASDAQ, on the other hand, had a corrective ascending triangle wave, and is ready to catch up to the DOW NYSE and SPX tomorrow....the candle today was a hammer, and that's something that's in the back of my mind..
The question is, what was the corrective wave we saw today on the NASDAQ?
I'm pretty sure that it was Wave 2, but it also could be Wave 4, and Wave 5, which means, we might not have seen Wave 2 yet. But the drop from 1930 to 1907 in the morning lasted about 2-2.5 market hours (about .500/.618 the time of wave 1), where the rally from 1852 to 1930 (percieved wave 1) lasted 4 market hours. At the 2.5 hour market of the correction today, the NASDAQ turned up and started to form an ascending triangle. So I'm 90% positive that today was Wave 2, but the other 10% of my brain is telling me that there could be that wave 2 retracement tomorrow.
If you look at the wave movements on the DOW and SPX, they are simply astonishing...the power of the movement, and the extremely minimal retracements the past 2 days scream of a Wave 3 rally in those indexes. I haven't seen wave movements of this power since the Nov-Dec '99 winter rally. Those two indexes could race straight for their January highs in the next week.. We haven't seen that on the NASDAQ, yet...and it could start tomorrow.
The 2 scenarios I'm seeing tomorrow, are either:
1.) The NASDAQ Futures turn up when the Unemployment Report comes out, and the Wave 3 of this rally (which should be 1.618 X 78 = 126 +1907 to 2000/2033), could start on the NASDAQ, carrying over to Monday, than a Wave 4 to around 1985-2000, Monday-Tuesday and than a Wave 5 to 2100, Tues-Wed.
2.) The NASDAQ retraces the entire move from 1852 to 1934 to 1903/1907 or at worst, 1883 in a fast wave 2. I'm a little surprised that the NASDAQ Futures are down about 5 right now, but this is expected, since the monster of all economic reports comes out tomorrow..
If there's any stocks I'd be invested in right now, it's in the storage sector...the main reason why is that the charts are easier to read, the pretty clear cut 5 waves moves up on the Wave 1 and flat or zigzag corrections on the Wave 2. These guys run in more predictable patterns, plus just about all of them across the board have reported great earnings, with forecasts of future growth. Also, alot of the major semiconductor stocks have easy to read charts as well. I would avoid any stock that hasn't followed the NASDAQ from Sept, anything biotech, anything involved with oil, anything with speculated accounting problems (don't go bottom fishing on these guys, their charts have broken down completely) , anything involved with wireless (badly broken charts), a few of the video game companies (THQI and ERTS look like they've completed huge 5 of 5's since the year 2000(!!) ) I don't think NVDA qualifies as a video game company, because they're more of a semiconductor company, and of cour
I like the following due to clear cut wave patterns, I'm not recommending them, I just like them because I can read their charts and what wave they're in:
STORAGE:
Favorites: BRCD (<morning star completed today) EMLX QLGC VRTS
Too many big "uhhs" to jump in: EMC NTAP SUNW
One that's quietly moving up: STK
SEMI'S:
5 wave up, easier to read: AMAT NVLS KLAC AMD INTC KLIC MCHP GNSS BRCM
The stock that all of sudden went from easy to predict to "uh what the heck is going on?: NVDA
I get alot of e-mails about a wide variety of companies, but before you ask, look at how the stock did from Sept to Jan.....has it been following the NASDAQ, or is it going sideways or dropping? Invest in the companies that have followed the NASDAQ, and avoid any company that's has a weird choppy triangular sideways move since Sept, and if these guys get a huge spike up, don't expect it to continue.
One guy, who used to be on the e-mail list, asked me about HC, Hanover Compressor (or something funky like that), and I gave him my brutally honest opinion..I'm not gonna BS with you...it was trading around 19-20 at the time, and I told him that the thing looks like a dot com, with a nasty looking chart and gap down red candles on heavy volume. I told him, if anything, I'd short the heck out of it, and avoid anything related to oil. The following week, the thing plummeted to 13.
If you want to ask about stocks you like or have been clinging onto, just take a look at how it's performed since Sept with the DOW or NASDAQ. If it's followed them closely, than it could be a decent buy, but if it's all wacky and sideways, like a lot of wireless, telecom or oil companies with big ugly red candles, don't expect the broader indexes to help carry their lifeless bodies to the moon.
gem-x
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. |
