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Strategies & Market Trends : Waiting for the big Kahuna
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To: Bull RidaH who wrote (29836)10/2/1998 12:30:00 AM
From: Jay8088  Read Replies (1) of 94695
 
Hi David,

I won;t go into the exact wave count. How about comparing with that '29 crash daily chart? It shows a sharp bounce from (what is now) 7,400 support. That could happen early next week finishing 1 of 3 of 3. There will be a collective sigh of relief among investors as analysts claim 'successful testing of Aug 31 low' vouched by extreme sentiment measure and oscillators. In a normal times, indeed such bounce would be bullish. However still ultra high valuations and deteriorating economic background suggest that such relief would be very short-lived. Going by '29 chart, 3 of 3 of 3 could start immediately. That would be as early as the middle of next week. So there are still 6-7 trading days till the October expiration. The week of Oct 11th could be gut wrenching for all investors. The panic may peak either on Oct 16 or 19th - 3 of 3 of 3 bottom? The last two weeks could see wave 4 and total washout at the bottom of 5 of 3.

In summary despite lengthy correction wave 2, wave 3 does not have to keep with 'time stretch ratio' IMO. I think market panic of this dimension would snowball and speed up as happened in '87.

However November options are definitely safer - and would be quite profitable IMO.
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