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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: RWS who wrote (16939)	4/20/1998 4:47:00 PM
From: Death Sphincter	Respond to of 94695

a barren drag??? is that a car race in Antarctica? carl

To: RWS who wrote (16939)	4/21/1998 5:44:00 AM
From: Bull RidaH	Read Replies (5) \| Respond to of 94695

Fresh From The Belly of the Whale... Hello RWS & Everyone on the BK thread... I finally made it back ashore (floated in on alot of worthless paper that had something about "April Put Options" written on it). I've already been given a new nickname that you Old Testament afficianados will no doubt have no trouble placing... "Jonah". Ok, before I get down to business, I'd just like to say that I really learned something about people from the posts, private messages, and email I received. The vast majority of people out there are super gracious, and ready to encourage and support someone when the going gets tough. I sincerely thank each and everyone of you for encouraging me and cheering me up. It worked!! Now, for the matter at hand... What happened? Of course, it's always obvious after the fact, but knowing what happened is crucial in understanding what to expect next. I've seen alot of skepticism of Elliott Wave unleashed after the market didn't severely drop as my forecast stated. In reality, the Elliott Wave Theory worked to perfection, and each wave clearly formed to fulfill the count, and the whole move was completed in the time frame alotted. The error was mainly in my prediction of how far the 5 wave move would carry the market down. Understand that the window was wide open for the market to go down, but obviously items like a better than expected CPI number, strong earnings from the like of GE, and strong institutional support for the market in the S&P pits and the continued rally in Europe were enough to prevent the market from taking out the 1105 support on the June S&P that would have activated the H&S pattern's downside targets. I was also tripped up in my wave count last week by a wave 3 down that was meager in size (atrophied by good news) compared to the first wave down. This is rare, but can and does happen. After belatedly fitting this odd-shaped piece into the puzzle, I find it quite easy to understand when and where the 5 wave move down ended and the next large set of waves that comprise the Wave 5 move up began. Because the A wave was 7.2 days in duration (3/20 3:50pm - 4/1 10:20am), the expectation for the C wave was that it would also be 7.2 days +/- 10%. Since C began Mergermania Monday (Travelers/Citicorp) 4/6 at 10:00, the expectation was for the C wave down to end actually on Thursday 4/16 at around 11am (I know the original post 15535 said Wednesday 4/15, but add 7.2 days to Monday at 10am and see what you get. Remember there was no trading on Easter Friday). Provided below is the count for the 5 waves down of C, perfected by Hindsight: ........................Begin......................................End Wave 1 ....4/6 - 10:00am - 1142.30...4/8 - 3:56pm - 1108.50 Wave 2 ....4/8 - 3:56pm - 1108.50....4/9 - 1:26pm - 1121.20 Wave 3 ....4/9 - 1:26pm - 1121.20....4/13- 1:04pm - 1108.40 Wave 4 ....4/13- 1:04pm - 1108.40....4/15- 3:04pm - 1128.40 Wave 5 ....4/15- 3:04pm - 1128.40....4/16-11:50pm - 1105.10 Notice that the Wave 5 down ended in the overnight session Thursday close to midnight, and took a crack one last time at that all important 1105 area before giving up the ghost. Thus, in my view (and please check it thoroughly on your own charts to see if it doesn't ring true), the correction is over, and we've started the 5th wave up of this large set of impulse waves higher that began on Nov.13th at 900.60 on the SPX cash. Elliott Wave Theory holds that if wave 3 is larger than wave 1, wave 5 is usually as large as wave 1, and often is nearly identical in size. The First wave up ran from 900.60 on Nov. 13th to 985.66 on 12/8, or 85 points on the SPX cash. The Second wave then ran down to 912.82 on 1/12/98. From there, the massive Third wave rally began, and ran to 1100 on 3/20. See above for a detailed description of the 4th wave correction that began on 3/20, and ended on 4/16 at 1105.10 on the S&P futures. So, starting this past Friday, I believe we've begun the 5th wave rally we've been waiting for, and if it lives up to theory, should take the S&P futures up near 1190. Implulse waves are difficult to pin down on how long they may take to complete, but my guess would be anywhere from 2.5 to 5.5 weeks. Strong patterns have already formed and are projecting the S&P futures into the mid 1150's once 1135 is broken. I'll discuss these in further detail at a later time. So how could myself and others have benefitted from my post #15535, which stated the market would be in a corrective phase starting that following Monday and would be scheduled to last roughly 7 days? Could have sold at the money calls at the beginning of the c wave down, or just shorted the spy or S&P futures contract (which I for one did) in the known reversal area (1141 was the targeted area), then covered on the appointed day (Thursday, 4/16). Buying to open options at anytime is extremely risky, and I certainly don't plan on buying them again or recommending others do so in the future. There are alternate vehicles readily available in nearly every index/security that will give you the capability of leverage without losing time value. Good Trading and Best Wishes to all, David "Jonah" Plonk

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