The market still looks and feels like it’s in Minute wave 1. Hard to see any type of Minute wave 2 having been made so I don’t think we are about to free fall. Minuette wave 4 traced a Triangle with a short e wave. I expect a bounce Monday, but there is also room for a little more downside first. Half my capital is committed to put options in AAPL, QQQQ, XLF, and SPY. I would like to add to these positions over the next week or two. One lesson learned from Primary wave 1 was not to get too cute, meaning trying to play each wave and time the market. The smartest money was short and stayed short. I need to do some more research on the best strategies for rolling over front month options into the next expiration cycle. Any suggestions?
————- GOOD JOB ————- maybe we see upside first to test the downside trend of your pennant abcde. that is around 1087. could have a minor gap down type capitualation move to complete this wave on Monday and then up to test that spot too.
whatever we get it’s going to be very interesting.
Do you see chances of us crossing 1100 in the coming week?
Shiva,
I am by no means an EW expert, but even with classical TA, you can see that we have a two bar break of 1121.44 on the weekly chart, so there is a re-test of 1121.44 (50% retracement of drop from 2007 to 2009). It’s highly unlikely we get above it, but I think getting above 1100 should be what GS and JPM will try to do next week.
I definitely hope your prediction this week is right, because I’m looking to reenter shorts heavily at higher levels (sold/scalped way too early). But what concerns me is that it seems everyone is looking for a bounce early in the week, so the game of chicken with no one buying may continue. Also, see Michael Davey’s doubts about the expected “bounce” at least at this (early) stage of the P3 game:
http://evilspeculator.com/?p=14411
At what levels will you be dumping longs and adding shorts? Is the 1068 level you’ve been mentioning your “stop”?
Even with the gloom and doom, I still see a positive economic outlook.
The underlying strength of consumer spending and business investments should sustain a U.S recovery. Did you know that business investment in machinery and equipment rose at a annual rate of 13% this quarter?
The only missing ingredient is job growth. Looking at the past recessions, business investment in machinery and equipmenthas forshawdowed every employment upturn .
This downturn is probably attributed to investors taking some profits. Positive economic news should lift this market in the weeks-months to come.
-Jay Bryan.
I just don’t see this economy turning around on its own.
It’s still on life support and if that stimulus is lifted it’s going south in a hurry. Either higher interest rates or withdrawal of stimulus wil down this economy again. Unemployement will not pick up anytime soon either. They can paint the face of the economy but the internals are always going to tell the truth. People will find out sooner or later what’s actually happening.
I would love to see a sustained recovery without the life support and see everybody back to work and we can make money on the long side, but the reality is that these supposed “experts” have screwed up the US and it’s affecting everybody.
zee, I know from your past comments that you don’t believe in the conspiracy theory but you have to acknowledge that they are screwing with the markets. That in itself is a conspiracy.
Also, I second Craig’s question regarding option rolling strategies. Any insight here would be greatly appreciated.
Once again Craig’s timing is spectacular.