Friday, May 18, 2012

W4 target has been reached

The target for W4 that I originally posted a few months ago (when it was considered completely outlandish by some) was finally put in today. I added the ABC move to the long term chart but I have not changed anything else, so note the targets for the waves have been in place for quite some time. While some people might think the sky is falling, this was expected.. since 2-3 months ago! And just like it sounded outlandish to predict a strong rally in December and a 1292-1297 correction target in March, I now favor a rally to 1510+ to complete the 5 wave structure on the chart. I consider the move from the 1422 an ABC move until proven otherwise. That "otherwise" would be W4 going into W1 territory which is 1267, so that is the line in the sand. As it stands, the market has not been this oversold since last summer (and 200+ points ago) by almost any TA standard. I track a few TA tools, the most simple one being the RSI on the daily and I circled it on the chart so you can see the obvious.

So I expect the beginning of a rally next week. And again should the market continue to fall, then I'll trash the long term count I've had since last year (and note I don't bother with alternative counts). But for now, I am loaded on the long side and expect some sort of news or change of sentiment that will spark a rally at any moment.

Have a great weekend!

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