Friday, January 31, 2014
I model the recent and ongoing NASDAQ composite rally as a dead cat bounce.
This is very speculative of course but I am going to model the current action as an A-B-C back to the 61.8% fib over the next couple days. If this plays out then after wave 2 is complete you do not want to be invested in any of the stock markets. 3rd waves are never the weakest and usually the strongest. So I am modeling this next 3rd wave down to perhaps 3900. Keep in mind that this is only 3 of 1 down. In other words, the carnage is still a good number of weeks ahead of us but people will begin to get worried after the next smack down. It is beginning to look like a "walk away in May" year.
Captain,
ReplyDeleteIf wave 2 completes like you've modeled, would you get out of your positions in TRX, AA, etc.?
Appreciate all of your work,
Chance
Hey Chance,
ReplyDeleteEach stock is at a different point in the wave chart so generalities cannot be easily made. Example: AA had 5 waves up, now double top formed (owl ears) and seems ready to break back down into the channel. I would not wait for the NAS to do this or that. I would look at that chart and say "expect pullback to at least the 38.2, probably the 50 and perhaps the 61.8. I would take profits but then be ready to go long after the a-b-c. I'll do another post on AA right now since I have not done one in awhile.
Thanks Captain! The knowledge is much appreciated.
ReplyDeleteThanks Captain! The knowledge is greatly appreciated.
ReplyDelete