Donald and all,
Here's my prediction for this week, based on EW read of the NDX and NAZ, which led both the rallies of recent months and the declines of last week :
On a 30 min chart of the NAZ (also the NDX) one can see the decline from the top on 2/1 as 1, then the 1st correction from 2/2 to 2/3 is the 2, the drop on 2/4 morning is 1 of 3, the rest of the day is 2 of 3, and the 3 of 3 selloff started 2/4 14:40 and ended 2/5 12:45, then we had what could be the 4 of 3 or the a of 4 of 3.
So for monday I expect either:
A drop in the open to around NDX 1950 (5 of 3), and a rally for the rest of the day (4).
Or:
A ~2 hours rally to NDX 2020 area (c of 4 of 3) and then a sharp selloff to NDX 1970 (5 of 3), and the rally until mid day Tuesday (4).
Then we should see another sharp and strong down move starting Tuesday morning/afernoon (depends on Monday's action) and ending Wednsday close or Thursday open (5), and the next rally should be the one you expect (by then you should get a pretty extreme ST oversold read). This rally should last 2-3 days and be quite strong, by the end of which there would be a good exit point for longs and good entry for shorts, around the 15th-16th, for a down wave that could be named c of 2 or 3 of 1 of a.
The chart for the S&P is not as clear as the NAZ, but the ending diagonal pattern (see exchange2000.com
would be sealed when we drop below 1220.
So far Naz and RUT support the downside, but S&P could still show some strength (since we havn't seen a break of the 1220 local low, and halted just shy of the 1230 intersection of two forks, I still give the SPX some benefit of the doubt, and a slim chance we'll see another marginal new high before the collapse, this time without new high on the Naz). The wave pattern from the 2/1 top looks like we ended 1 on 2/2, 2 on 2/3, 1 and 2 of 3 on 2/4, 3 of 3 could have ended at Friday's lows, therefore the 4 rally on Monday should not pass SPX 1251. If we do see 1252 and over Monday or Tuesday, then there's a better chance for a try at David Plonk's 1290. This, however, is not my opinion, with the weakness shown by Naz and RUT, and if we break 1230 Monday morning then I believe the chances for a rally over 1251, or any significant rally before Thursday would be greatly diminished. Once we break 1220 next support is 1160.
ATG |
