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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (19403)	4/30/2001 4:50:07 PM
From: velociraptor_	Read Replies (1) \| Respond to of 37746

My expectation is that today's highs should hold for now. If we happen to rally over the next 2-3 days and take out the highs then we have to look for the next higher targets on the indexes. DOW 11,034 S&P 1300 Nas 2250 Thus, far, the decline off the highs today was pretty strong and the bounce looks corrective so we SHOULD head lower over the next few days. May 3rd is a turn date and that could be a low...we'll see. This market has managed to confuse many over the last few weeks, including myself. The one thing I am pretty confident on is the pattern that is now unfolding and that is the leading diagonal in the indexes off the lows. In fact, I am more confident of this than anything over the last month. From this pattern, there are really only 2 scenarios. Leading diagonals can only be in a wave 1 position (very bulish) or a wave A position (very bearish). Thus we are left with the move off the lows either being wave 1 of a major degree to start a new supercharged bull (DOW 15,000+), or wave A of a major degree. In the latter scenario we aren't left with many options given the degree of the retrace, so the favored scenario here is that the DOW has only completed wave 1 down from the highs and is only just now tracing out a wave 2 correction. In other words...we haven't even seen the big 3 down yet and won't for a few months still. Also, this last scenario has very bearish implications and could see the DOW below 8000 easy. Either way the rising wedge should break soon and provide a nice short trade. Then we start looking for reversal points at major support levels as well as the 38%, 50%, and 62% retrace off the lows. Given the above scenarios, this is what I see near term. Bullish, we decline now lower than 9100 on the DOW in wave 2, and then begin wave 3 which should take the DOW well over 12,000 in the next 6-12 months. Bearish. We decline in wave B of the correction and then take off to higher highs with potential targets of 11,000, 11,400 or just below the highs near 11,700 but not exceeding it. See the caveat? The ONLY way we get bear confirmation again is with a cross below 9100. The ONLY way we get Bullish confirmation is by making new highs in the DOW. Until then both scenarios can outline similar paths. In the bullish case waves 1-2-3 will trace out a 5-3-5 wave pattern and wave 2 can retrace almost all of wave 1 meaning we could easily fall back to near 9100 before starting wave 3 up. which should go to new highs. In the bearish case we are obviously in wave A of a zigzag. Wave B could easily retrace almost all of wave A but not more. Since this could all be part of a wave 2 from the DOW highs, it could easily retrace most of wave 1, meaning Wave C could then go almost all the way to the highs, but it should not exceed it. Wow....talk about a conundrum, but this is where we are in the bigger picture. That solid 5-3-5-3-5 leading diagonal in the indexes off the lows pretty much nails it down to this. Until then, we'll have to work our way around the smaller wave counts to try and make a buck, but longer term no one will have a clue until we cross above the DOW highs or below 9100.