gem-x's Elliott Wave Forecast: March 5, 02. Heavy volume breakout, for possible new upwave
Today was clearly a confirmation day..wonderfully big volume, bullish internals, ...we followed through on a follow through, and there's two big white candles going up from Friday to now, on increasingly heavy volume.
Right now, we're clearly in a Wave 3 of the first Wave 1 move in a new uptrend..
Wave 1 was 1696 to 1793
Wave 2 was 1793 to 1728 (.618/.78 retracement)
and Wave 3 is occuring now..
Today's heavy volume, a/d line/ new highs/new lows, advancing vs. declining volume were all bullish across the board..further extending it's breakout above the downtrend channel as well.
The upward channel has held since 1728, which helped extend today's move...it was just 1 point away from the channel in the morning, bounced off of it, and rallied strong...and here's what I see for tomorrow and where it should hold to keep this wave going:
angelfire.com
A break of the upward channel would occur around 1835, and would likely cause "Wave 4", and retrace between .382/.500 of the move up so far..(1810/1792)
But if it holds, the next levels to watch going up are 1873.5 (1.50 X wave 1), 1885 (1.618 X wave 1) and 1901 (1.78 X wave 1)...but if the NASDAQ gets to those levels, and starts to fade, and a channel break occurs, that correction would be a Wave 4 down...
If this is a standard Wave 1 of a new upmove, the first move should retrace .618 of the move down on heavy volume from top (2099) to bottom (1696), which is around 1942-1945.
If it gets to 1885, I'll have pretty tight stops...can't get greedy on 2 day 15%-20% gains..
What I'm expecting tomorrow, is the last move in this Wave 3, should the upward channel that I drew on the chart break. If we start stalling at those 3 resistence levels and the "uh oh channel break" occurs, I'll be taking my profits...it might be a quick sharp drop....a break of 1901 could extend the move further, so that's the level I'm watching on the upside...but a standard Wave 3 usually moves 1.618 X Wave 1, which is 1885...
Of course, if the channel breaks in the morning, I would already have gotten out.. |
