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.


Anonymous said...

Right on Todd. I think you nailed it. Long is now the play on any setback. Hard to buy into a 300+ point day. 1320 minimum target. Diver

Anonymous said...

Don't give up on the short wave 3 trade. It may come quicker than you think. It won't give you a warning. Be ready. We may have seen the highs already or they be be just a few points away. Wave 3 declines don't ring a bell and say HERE I AM. :-) Diver

Todd S said...

Lol, good point Diver. But don't worry, I haven't given up on the wave 3 of (3) down at all. But I still see further rallying in the days ahead so I'm trying to distance myself from being really focused on every move of the market to prevent making an emotional decision.

But thanks for making sure I'm awake! :)