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

To: RWS who wrote (17358)	4/26/1998 5:03:00 PM
From: Death Sphincter	Respond to of 94695

RWS.... based on my chart of the DOW....what i am thinking is that we are in the A of 2. the low Friday at about 2:45 was the end of 3 of A. therefore a 4 of A corrective for another 1 day +/-....then 5 of A to slide down for a test of 9000, and maybe a little below....ending A of 2 on Thursday(April 30). B of 2 would then begin and last to around Wed. (May 6) or Thursday (May 7th). this move would take the Dow up to test the 9200's highs. Then C of 2 would begin. I am basing my outlook on the economic releases due next week. Durables on Tuesday...ECI, Initial Claims,GDP and Chicago Producers on Thursday. The market will be waiting to see what these reports say. ECI #1 because it is so heavily weighted by Greenspan. Then Durables and GDP. IF IF..there are no surprises that are BAD for the bull market, then I expect to see a rally (B of 2) to kick off at shortly after 10 on Thursday. This rally would be fueled by "the beginning of the month infusion of $$$ to funds factor". These beginning of the month mini buying sprees usually last a few days. This movement will shakeout the "talking heads, etc. 5% correction bears" ...it would be followed by C of 2 and would provide a sharp correction to take the S&P down to the levels you and I are seeking. so I'm blending TA/EW and market events. NOW>>OF COURSE if the econ data coming out this week is all bad the above scenario would not play out. It is because of the unknown that i have no position in the OEX at this time, I cashed in my May OEX(that i bought on April 14th) for a small profit on Friday. If the early week data is positive and the market hasn't moved very far up, I will anxiously watch Thursday's data...if that data is positive i will consider a small position of May Calls for a quick pop and then watch for my entry into the C wave of 2. Question: IF we have gotten to wave 5 and this is 2 of 5...is there anything in EW theory that indicates that a 2 wave SHOULN'T be a major correction? carl

To: RWS who wrote (17358)	4/26/1998 8:22:00 PM
From: ratan lal	Respond to of 94695

RWS I am a little confused. You have SPX May puts. You expect the SPX to go not lower than 1095 tomorrow but then head up towards 1115. Q? - Why would you not sell your puts (and buy calls or stay out till SPX about 1115 adn then buy puts again for major drop in wave 3 down to 1080 or lower) ?? ratan

To: RWS who wrote (17358)	4/26/1998 9:09:00 PM
From: Bull RidaH	Respond to of 94695

Hi RWS, I reviewed the basis of your current wave count, and realize where we differ is the view of the market action from 3/20 to 4/6. The main reason I was very much on guard for the prior set of impulse waves higher to end on 3/20 was due to 5 levels of impulse waves which were all scheduled to end on that day, and at the 1112 area on the June S&P. I was tracking these waves closely all the way back to the 1/12 beginning of that move, and all my indicators suggests that they did indeed end on 3/20, and the A Wave correction began there. If you review the price action from 3/20 to 4/1, which is where I believe the 5 waves of A ended, do you notice substantial change from the prior weeks? What confirmed it for me was not only the action during that timeframe, but the fact that Vix rose substantially, and the "diamond" reversal pattern formed during that time as well, giving clear signs on where to expect the C Wave down to begin after the B wave higher. I realize that the price action in this time frame was not your typical A wave price action, and the following C wave decline was certainly atypical, as many including myself painfully recall. But the reason for the ultimate "sideways" correction that lasted from 3/20 to 4/16 can be found in Elliott's theory, which I should have placed in the forefront of my mind: The theory of Alternation, which states that if 2nd wave corrections are sharp, then the 4th wave correction is usually sideways, and vice-versa. The 2nd wave correction that lasted from Dec. 8th '97 to Jan. 12th '98 was extremely sharp, taking the SPX from the 980's to the 912 area. Thus, what should I have been expecting for the wave 4 correction that I firmly believe completed on 4/16? Sideways!! The reason my opinion was for substantially lower prices was due to the size of the unretraced move from Jan.12th to March 20th, plus the size of the patterns that had formed that would have propelled prices sharply lower had they been activated (by breaking 1105, the infamous neckline of the head & shoulders pattern). In retrospect, I should have expected that area to hold based on the theory of alternation, and refrained from position agressively for a down move until it did. Won't make that mistake again. Even in my scenario, you're fine holding puts through Wednesday, but I'd be vigilantly looking for bottoming action in that timeframe, especially if 1100 is not taken out by then. Best Wishes, David