Tsunami
Well-known member
Re: now it gets interesting
Nordic, Just one note on your post. Peter doesn't know much about Elliott Wave analysis and he called this a potential wave "2". That hopefully can't be correct since if it was then the following wave 3 down (which can't be shorter than wave 1 and are typically 162% of wave 1) would take the index's nearly to zero by the time you got through the following wave 4 and 5 (wave 5's are typically the same length as wave 1). We'd be lamenting the end of America as we knew it at that point. I think what we just had in Feb/Mar was an initial ABC "zig-zag" correction (note also that there is no clear wave 4 in the crash, so that helps make it clear to me that it was a 3-wave decline) and now we're in a 3-wave counter-trend rally, a wave X or whatever you want to call it, but it doesn't look impulsive so far. So that tells me that a second ABC fall is coming, perhaps down to the 1700-1800 area that many gurus were looking for, there's no way to know...that second big fall would make the whole thing a "double zig-zag" in Elliott wave slang...then either that would be the bottom, or we'd see another similar 3-wave counter-trend correction up like the one we're in now, call that one a wave Y...then comes yet another big 3 wave drop. Within the 3 wave drops the wave A's and C's have 5 waves within them, but when the market is going straight down in a free fall you often can't see those waves clearly. This is how bear markets stair-step their way down, and makes them very hard to trade since you don't know how many of those steps down there will be. The best way to trade them is to identify clear corrective rallies, then establish short positions for the next plunge, which I'll be doing sometime between today and Monday....if my TSP was in an IRA then I'd be buying something like SH to short the market rather than being stuck in the G fund. In my smaller play accounts I go with the 2x or 3x leveraged ETFs, or QQQ puts or TVIX...that's all been working well for me so far this year. At some point it seems that that QQQ needs to capitulate along with the rest of the market, so that's what I'm looking to see for a more likely bottom.
Nordic, Just one note on your post. Peter doesn't know much about Elliott Wave analysis and he called this a potential wave "2". That hopefully can't be correct since if it was then the following wave 3 down (which can't be shorter than wave 1 and are typically 162% of wave 1) would take the index's nearly to zero by the time you got through the following wave 4 and 5 (wave 5's are typically the same length as wave 1). We'd be lamenting the end of America as we knew it at that point. I think what we just had in Feb/Mar was an initial ABC "zig-zag" correction (note also that there is no clear wave 4 in the crash, so that helps make it clear to me that it was a 3-wave decline) and now we're in a 3-wave counter-trend rally, a wave X or whatever you want to call it, but it doesn't look impulsive so far. So that tells me that a second ABC fall is coming, perhaps down to the 1700-1800 area that many gurus were looking for, there's no way to know...that second big fall would make the whole thing a "double zig-zag" in Elliott wave slang...then either that would be the bottom, or we'd see another similar 3-wave counter-trend correction up like the one we're in now, call that one a wave Y...then comes yet another big 3 wave drop. Within the 3 wave drops the wave A's and C's have 5 waves within them, but when the market is going straight down in a free fall you often can't see those waves clearly. This is how bear markets stair-step their way down, and makes them very hard to trade since you don't know how many of those steps down there will be. The best way to trade them is to identify clear corrective rallies, then establish short positions for the next plunge, which I'll be doing sometime between today and Monday....if my TSP was in an IRA then I'd be buying something like SH to short the market rather than being stuck in the G fund. In my smaller play accounts I go with the 2x or 3x leveraged ETFs, or QQQ puts or TVIX...that's all been working well for me so far this year. At some point it seems that that QQQ needs to capitulate along with the rest of the market, so that's what I'm looking to see for a more likely bottom.
