From your Plonk Surrogate Reporter!!!!
+David Plonk (15611 )
From: +David Plonk
Wednesday, Apr 8 1998 4:15AM ET
Reply # of 15720
UPDATE FOR 4/8 & Suggested timing & entry strategies:
First, let me say thanks to one and all for your gracious response. I'm very grateful to
have the opportunity to make a positive impact.
Now, for the update:
As you all know, I was expecting the C wave down of this corrective pattern that began
on 3/20 at 3:45pm to begin Monday, 4/6, with the window for the down move to open
after 2pm. Mergermania pushed the end of B and the start of the C wave to first thing
that morning, and after the S&P June futures traded up to 1142.3, the C wave down
came to life.
You EW'ers know that C is a 5 Wave move, and my time calculations are now set in
stone for the window for the C wave down to last 7.25 trading days, give or take a few
hours. So from early on Monday, 4/6, that would allow for an open window through
next Wednesday morning, 4/15, around 10:30am, give or take.
Thus far, we have nearly completed the 1st of these 5 waves down. The 1st of 5 waves
can itself be broken down into 5 waves, with the 1st wave moving from 1142.3 to
1131.10 (4/6-12:42pm). The second wave (a small degree ABC corrective wave)
started here, and finished at 1135.80 (4/6-2:14pm). From here, the severe 3rd wave
down began, and carried the market down to 1110.50 (4/7-3:12pm), a 25.30 point
move. From there, wave 4 up began, and as of the close, it had finished the a part of 4,
and brought the S&P's back to 1119. Resistance to the c part of the 4th wave up will
come in at 1124.70, which many of you will recall was the "point of no return" number I
gave earlier this week. Not that the c part of 4 can't take the market higher, but I don't
give it a very high probability (less than 20%). In the unlikely event that it does. I would
expect 1131.20 to be impenetrable.
When the c wave of 4 ends, which should be early Wednesday before 11am, Wave 5
down will begin. When the S&P's fall more than 6 points from the high they make early
Wednesday, you will know that wave 5 is in motion. I will look for a pattern at the top
of wave 4 that might be helpful in predicting how far down wave 5 will run, and If i find
anything conclusive, I'll update. EW theory suggests that wave 5 often is the same size
as wave 1 when wave 3 was larger than 1 (as it was in this case), so we MAY be
looking for something 11.2 lower than where wave 5 began from. However, I've seen
too many cases where wave 3 was larger than 1, and the subsequent wave 5 was larger
than 3, so I don't plan to cover blindly, at say, the theoretical 11.2 points lower than
where the S&P's make their turn down. If we get a larger wave 5 than 3, which I think
is probable (60% or better), that would take the S&P's under 1100, which is more
inline with my original blueprint.
I will not cover any shorts if wave 5 pulls up before taking out 1100 on the downside.
The reason is, the large degree Wave 1 down will have taken 2 whole days to complete
by tomorrow morning, and was very complex in formation. Therefore, reliable wave
theory holds that a simple, and quick corrective wave follows a complex impulse wave,
and vice-versa. Thus, I would expect the Large Wave 2 to last for about half a day, and
rally no higher than where the smaller degree wave 4 terminates early Wednesday
morning (1124.70 prediction).
THIS LARGE WAVE 2 RALLY WILL BE THE BEST OPPORTUNITY TO BUY
PUT OPTIONS, NO MATTER WHERE IT TERMINATES. EXPECTED RETURN
ON PUTS: 20 to 50X. Why? Because Wave 3 will be on deck, The godzilla of wave
moves, especially as we proceed into the smaller degree wave 3 of this large wave 3.
1987's Crash was a wave 3 of 3 of C collapse, as was July of '96, April of '97, and one
that you'll all remember, 10/29/97, the largest point collapse ever. Does this one have
potential to exceed all of these in terms of point losses in the indices? Sad to say, Yes
(Well maybe I'm not really sad :o)..). In fact, my projection methodology that I
mentioned in prior post that I've used to accurately predict every large correction in the
past 3 years, and which also accurately predicted the size collapse in '87 and '90, has a
very stark forecast which I shutter to think about.
Judging by the activity on this thread now, and the torrent of private posts I'm receiving,
these calls are being followed by a large number of traders. I would prefer not to ever
be accused of calling the market down to a certain number for my own benefit, and
don't care to be investigated by the SEC for market manipulation, so I'll withhold the
exact projection for now. But I will give a clue as to this number, and from the clue, and
my prior posts, the inquiring mind should be able to figure it out. The projection calls for
a level on the June S&P futures where when you multiply 14.969 by a Biblically
significant number (one which all Bible scholars should be able to click right off the top
of their head), you will arrive at the target.
For those not Biblically inclined or who don't care to slosh their way through my prior
posts, just stay tuned to BK, and when we reach the point when it's time to cover
shorts, I will announce with a big "NOW!". Warning: the bottom of the move could
come BEFORE the Wednesday morning window closes. That would be the case if
wave 3 overachieves in devastation, which oddly enough happened in '87 and this past
October. Would Monday be a fitting day for such a spectacular move down?
Hmmmmm. And what's the event over Easter weekend that will be spawned to bring
the market down? I dunno, your guess is as good as mine. All I know is anybody long
futures or short puts after Thursday's close is taking their life into their own hands!! |
