Friday, June 4, 2010

Truncated 5th

The 5th wave truncated at 1103 and this mornings move is either an A or a w1. It's hard to tell where the market is headed in the intermediate term, the trend turned up this week because we have had higher highs and higher lows so far, which could well put us above 1100 again next week. If the weekly low is broken then the trend moves back down.
Entered long position at 1081 to play the ABC move. Planning to go long up to retracement or peak of wave B or 2 and then short.
Portfolio: Long entry 1081 - Down 14 points from inception of trades.

Thursday, June 3, 2010

This was a 3rd wave

I think the move today indicates that we are on a 3rd wave. Therefore, I stopped out of the short position at 1103 and waiting for the 1110-1115 area to short again. I think if we add 16 points to the low for today we have a target. As of now it is 1108.

Wednesday, June 2, 2010

Top of Triangle or Wave 3?

Seems like yesterday's move serve to fool everyone. It seemed at the close yesterday that it was a start of wave 3 down but it quickly reversed in the morning. The overall trend is down and I favor a drop tomorrow to a higher low relative to yesterday's drop. How low it will go will depend on whether this is indeed a 3 wave or part of an E wave to the lower trend line of the triangle. I think it's important to note that there is an obvious head and shoulders target and the 200 DMA. Therefore, if there is any sustained momentum, I personally will be abandoning shorts and possibly even going long on an intraday basis. There is a lot of volatility now and the market doesn't owe anyone a "P3" nor the H&S target.

So tomorrow, I favor a drop to the low 1080's area before resuming the uptrend.