Friday, August 8, 2008
August 5, 2008; Wave 2 Rally Still in Full Force
Obviously today's huge 300+ point rally negates any immediate bearish scenario calling for the wave 3 of (3) already being underway. There seem to be a lot of waves, both up and down, that can be counted as impulse waves which keeps giving misleading signals of the larger trend. This has been very costly for me. Moving EWP counting aside for now, let's focus on the above chart. It should a resistance shelf in place over the past couple weeks. The Dow shows a similar shelf around 11,700. The way I see it, if the Dow and S&P close above this shelf today, not only does it break a strong resistance level, but it will create a huge bullish engulfing candlestick totally negating yesterday's decline. This is extremely bullish and will open the door for the S&P to get to the 1320 area with ease, and perhaps in the 1350 area.
All-in-all, the next few days/weeks looks very painful for the bears.