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

To: yard_man who wrote (21405)	7/9/1998 2:46:00 AM
From: Bull RidaH	Read Replies (1) \| Respond to of 94695

Tippet, I know after today, it looks like the market is in a hurry to get there, but I believe we'll see it simmer down now for a bit before the real launch higher begins. I expected a rally back above yesterdays highs today, and when a pair of megaphone patterns formed and were violated to the upside, with both patterns targeting the 1177 area on the futures, I had my confirmation that this upmove off the 6/30 lows had drawn to a conclusion. A different interpretation of the wave formation from the 6/30 lows would assign an ending diagonal 3-3-3-3-3 formation, with the last set of 3 waves concluding today. This is a very typical pattern for a 5th wave, which I believe was what we were in from the June 16th lows (That is, as you sub-divide the 3rd minor wave up that began 6/16, Its own 5th wave began 6/30, and appears to have ended in a diagonal wedge). There was surely a nice wedge formation in place from early this week, which was violated in yesterday's selloff, so I give this interpretation alot of credibility. This would mean that the minor wave 4 correction began today from the highs at the close, and we'll see the A-B-C correction progress from here. Since minor wave 2 (June 10th - 16th) was a sharp correction, I would expect this correction to be a flat, if not expanded flat correction (meaning the B wave rally will break into new high territory). This also means the correction could easily drag out into the middle of next week, with the same depths achievable as mentioned in the earlier post. I think this is a good time to sell naked and covered calls, or short a futures contract or index depository receipt. Buying puts is the hardest way to make money I've ever seen, and the easiest way to lose it. Regards, David