Keep discussing shorter term waves as well. It motivates me as a reader to think about key levels and it's been financially rewarding for me as well . Having to correct and adjust is what we always must do as traders, unless we're in to be market gurus (which I'm not). Keep it up! My view of things for the time being: http://img178.imageshack.us/img178/248/dowip3.png I sure want to see us go up some more from here because I'm not ready to plunge into this market yet with my shorts at this level as a double top!
.......Minute.....Minor.....Intermediate.....Primary W=....win,........well,.........worthy,.........wealthy pattern M =...miss,.....morbid,.......moribund,.......mortal pattern M & m in Dow Daily and Intraday Charts? M & m in S&P Daily and Intraday Charts v.s. rSHS.
25 SMA investors joined forces with the Pres' Support Line at 38.2% retracement which had cut through the subprime trendline, to drove the Dow up. If this ends in a Five below August 24th high, the Minor Wave V)V1]4) may be a triangular wave. If it overshoots and forms a larger Five from the August 16th bottom, then Minor Wave V)IV c]1)2 may be an irregular correction. If Intermediate Wave V)V1]4) has ended the Dow may run through 14,000.
The supposedly Minor Wave 3.2 is a complex correction, it is Quintuple now and may turn into Sextuple next week. To count it as an impulse wave requires two wave 5 failure. Look at M's, they may mean something, especially when there is an early moving average crossing.:eek:
Who will win this battle? 25 SMA investors joined forces with the Pres' Support Line at 38.2% retracement which had cut through the subprime trendline, to drove the Dow up. If this ends in a Five below August 24th high, the Minor Wave V)V1]4) may be a triangular wave. If it overshoots and forms a larger Five from the August 16th bottom, then Minor Wave V)IV c]1)2 may be an irregular correction, the 50 SMA investors and the Minor Wave 2.a trapped Bulls may dump stocks here. If Intermediate Wave V)V1]4) has ended the Dow may run through 14,000, because all the excess stocks have returned to the insiders where they belong.
Medium Long-term Investors. For those who do not have the gut to withstand a 40% drop in the Dow and more than 80% drop in many individual stocks should play the Cycle Waves, that is to enter the Market at the beginning of Cycle Wave I,III and V, and get out before Cycle Wave II,IV and A diminish the profits by more than 10%. Divergence between ^DJI, ^DJT and ^DJU may help pinpoint the time to exit the Market. See picture. There is one false divergence at Dow Primary Wave V)I3]. There is yet a divergence in Cycle Wave IV).
Short Long-term Investors. Those who can't wait 10 - 20 years to sell stocks, should play the Primary Waves which are about 3 - 8 years long. Count Intermediate 1), 2), 3), 4) and 5) then sell, using 200 SMA as an adjunct, not as a sell signal, but as an oversold gauge for buying opportunity as insiders do. Primary Wave 2] and 4] usually fall below 200 SMA.
Medium-term investors who invest for one to two years, should get out of the Market or buy some hedge at the end of and Intermediate Wave. 50 SMA or MACD (50,1,1) may be use to gauge the oversold condition, to identify buying opportunity.