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To: The Freep who wrote (10101)	8/15/2001 9:58:04 PM
From: AllansAlias	Respond to of 209892

Tonight's "Deep Thoughts" Chart: "When counting goes too far" geocities.com Think the author sees a bounce? -s All the effort expended by the Elliott counters since the May high could probably have accomplished something quite useful. -g/-ng

To: The Freep who wrote (10101)	8/15/2001 10:18:58 PM
From: AllansAlias	Read Replies (4) \| Respond to of 209892

Freep, If there is not doubt in the air when we hit the bottom of the wedge, then it's not a good place to go long. I am hoping for significant fear and a great gnashing of teeth from the equity bulls when we get there. You have a few choices. They'll be different than my choices because we have different risk tolerance and so forth. The middle biter strategy calls for one to perhaps ease into a 1/3 when we get outside the wedge. This is guessing a bottom some would say. Baloney. It's a high-probability turn area and there's nothing wrong with going with the probabilities. If it does not go though the wedge some, then it is less interesting to me. Remember, I want gnashing of teeth. Anyway, then I would sit on my stop and see if a real good bounce forms. I don't care about missing this bounce with only a 1/3 in play. I might even cash out the 1/3 if it's "too good, too fast" because chances are real good we'd get a quick backtest in that case, but that sort of cute play is only for s-t traders. Anyway, the significant pullback will come one way or the other. The middle biter excels on the pullback, whenever it comes. It's then you get another 1/3. The stop is easy now as we've put in a prior low. Still, if it retraces more than 80% I'd likely pull the second 1/3 'cause not many 'B' or '2' waves come back that far. The expectation is that no matter what form the bounce takes, it's always best to get in on the pullback. This positions you for a '3' or a 'C'. Both are nice. The other thing I like about them is that they unfold quickly. If they do not, then you have a hint that it is not what you thought and you can act accordingly. In the normal case, your capital is not tied up for long because you are only in while it's driving. You could get another 1/3 when it takes out the prior high, you know, the one formed when we first bounced from below the wedge. I would counsel against being cute there. Some would say to wait until it blows by and pulls back to that prior high for a test, but 3's and C's move fast and I prefer not to be cute. Have a target in mind. Something modest. For example, most 'C' waves (what we bought for at the first pullback) will push at least 62% of the 'A' wave (the first bounce from below the wedge). If it's a 3, that'll push even harder. So, at this modest target I would book something (half or less) and let the rest ride. Keep the stop fairly loose in the beginning of the run, you'll need that. As price pushes past the lowest expectation where you took the profit, move the stop on the rest closer to the market. The higher it goes, the closer you move it. This allows you to ride a fast moving market (e.g., short squeeze) without killing a winner, but locks in a good profit on the next decent pullback. The main thing, no matter what your strategy might be, is to decide what to do beforehand and stick to it, including stops of course. Don't let all the voices/opinions change your mind. Some will be telling us that the S&P is going to 900. Heck, it may. The worst that could happen is you're wrong. That doesn't cost that much. It's the being stubborn that's expensive. Good trading.