Fwd: gem-x's Elliott Wave Forecast: Mar 01, 02
Pretty sloppy day...it was pretty obvious that the big guys were
throwing things out the "window". Poor GNSS...was the news really that
bad? Rallies were sold into all day, and there were quite a few
"straight lines down." And in a replay of last December, it looked like
Janus and Fidelity were tossing out tech (particularly storage)in favor
of lower beta DOW components. Now, what wave could we call this today?
Yesterday had the drop of 1793 to 1741, which could have either been
"Wave A" of a zigzag or "Wave 1" of a new (if not final) downmove that
could break the previous reaction low and test 1659..than today, had an
exact .618 retracement of that drop, from 1741 to 1773 which could have
been "Wave B", or "Wave 2", and than another wave down, which could
either be "Wave 3" or "Wave C". The thing about this move down, was
that it looked more triangular than an impulse Wave 3 down...so there's
a chance that it's an ending diagonal that extends to tomorrow morning,
to around 1717-1721.
Possible scenarios tomorrow.
Hopefully, this re-test would be a replay of the bottoming move in
September.. .78 retracement, than "the" rally. To find out if this is
just a re-test of 1696, or a wave that would break 1696, is how the
wave reacts tomorrow....if it's a zigzag, it wouldn't drop lower than
1717-1721, which is around .78 retracement of the previous up move, and
equal length to Wave A...in that case, we'd drop to those levels and
rally strong...but if it's a Wave 3 down, it would break those levels,
and drop 84 points (1.618 X Wave 1 down) to 1689. The 1717 to 1721
level is extremely important..if we break clear through that support,
there's a strong possibility of that nasty Wave 3...and that test of
1659. I was looking for a break of that downward channel, but it never
developed...so again, I'll be watching that channel, and looking for a
potential break. I've added my wave count chart of the zigzag
correction from 5133 to 1387..check it out..I'm sure it would be a nice
ray of light for the bulls..if you look at that chart, we've clearly
broken the downward trend channel from March 2000 to Sept 2001, which
would just about confirm a new bull market...but to put a little damper
on things...I discovered that Yahoo has historical quotes on the DOW
going all the way back to the 1920's and 1930's which is pretty cool..I
never knew about it. Anyway, the reason I bring this up is because
there's a wave count that I've kept hidden, and locked up in a cage.
I'm going to bring it out. The first rally from the Great Depression
wave retraced about .236 of the C wave down, and lasted 53 days (sound
familiar?), and the Wave 2 that followed was awful...it lasted 144-155
days, in a bizarre sideways choppy move, that retraced to exactly .78
and than after that super long sideways move, the Wave 3 rally started.
Basically, what I'm saying is, that this correction may last longer
than we think, and the next few months might be a trader's
market....short rallies, short drops, going nowhere, and maybe only the
Elliott Wave guys may survive, or prof
it off of it. Channelling and Elliott Waves might be the only way to
go, if we don't ignite the Wave 3 soon...but on a brighter note, we
sure got a lot of fuel for a potentially large rally...the put/call
ratios remain near all time highs on the 21 and 10 day MA, and have
been this way almost 3X longer than last summer. That means there's a
lot of complacent greedy put holders dreaming about riches...on the
Rydex, the average joe has almost a record amount of money "on the
sidelines" in money market funds, and short interest keeps breaking new
highs. We have plenty of fuel for a large sustained upmove. I would not
like to see this correction last longer than 57 days...today was
fibonacci day number 55, so it would be awful if we break new lows
tomorrow, and keep breaking them going into March and day 57. We need
to hold those lows and rally tomorrow...bad....but if this is an ending
diagonal, and it truncates....the rally could be extremely strong. R.N.
Elliott stated that a combination of a truncated 5th wave down, and an
ending digonal is one of the most bullish waves...the violence of the
move up could trash a lot of complacent shorts..
Ending comments/other technicals
I'll be watching the channels tomorrow like a hawk, again. The
important levels to watch tomorrow are 1717-1721...a break of those
levels could bring the NASDAQ to 1688 and a test of 1659 (.618
Fibonacci level), but a truncated ending diagonal could prove to cause
an explosive up move...and if it moves up, it better have volume! 21
day MA Put/Call ratio: .86 (very bullish) 10 day MA Put/Call ratio: .86
(very bullish) NASDAQ Volume: 1.93 billion (heavy going down) Side
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