[simple guy]

Well

SG predicted last night and this morning that the traders would somehow try to get short and possibly get the stick save in to do so.

The rumors were Bin Laden captures, captures of his sons, CIA in the dessert with goggles on watching from behind the burning bush... etc.... cracked me up.

Hey, whatever they gotta do to get back in and get short is what they will cook up... they were caught flat... and they made the shorts cover quickly....

That said... lets talk about the wave structures for once ok?

I predicted on Monday this week on the IDS board that 23.95 on the Q's was the next bottom. This was based on Fibonacci calculations, and you can see E waves are extremely accurate most all of the time. Sometimes the wave pattern gets confusing, but what never gets confusing to me is the price at which we are heading. Waves dont give you the time frame, but the price I can almost always hit.

Retraces on a wave 2 impulse have commonly been 78.6%... which is generally the highest retraces you would see. Normally they would be 38, 50 etc.. 61.8... but over the last 4 weeks or so, its been common to see 78.6% retraces. I have been calling these "Hysterical retraces"... because thats what they are...

Why? Well, during a third wave, which unfolds over many months, not days or weeks.... the fuzziness of thinking creeps into the public psyche. This is true not just with stock directions, but with other phenomena. Witch hunts in India and Africa.... Bin Laden capture rumors, Duct Tape runs to the stores, etc.. etc....

Thinking gets blurry and fuzzy... this is a Bob Prechter Jr theory. I think he is clearly right. At this point in the wave cycle, we are on the precipice of a major watershed decline to the downside. We are on the verge of a major cliff dive. Prior to this happening, we have alot of nervous bears, nervous bulls. People on the sidelines unclear on what to do. Panic buttons being punched to get short, get long, to cover... to go into cash... etc....

Consequently, we have had a churning process going on for the last 4-5 weeks on the QQQ index. Actually, taking out some normal wave patterns... we are right where we were at the end of December.... arghhhhh.... tough to make a buck if you dont understand the waves and the patterns developing.

SG theorizes that we have continued in a pattern of 1's and 2's..... I have gone over this before many times, this is not a new theory that Im making up all of a sudden to explain the markets. This is the case....

Examples today.... 1311 top down to 1293 in the afternoon... wave 1
1293 to 1307.... wave 2.... throwover top....

A hysterical retrace wave 2 as it were.... therefore frustrating for bulls and bears alike....

Not for me. Im sitting on my RYVNX fund because I know with 100% clarity that the next move is going to be down. I know that we are NOT going up, I know that we are not starting a bullish wave pattern. I know that this 3rd wave is nowhere near complete at all, this is what gives me that confidence.

I know the 3rd wave can't possibly end until about 829 on the NDX. 829 on the NDX is about 91 on the RYVNX fund, give or take some pennies. SG put up this chart of the RYVNX a few nights ago on this thread... and as a mere coincidence, the RYVNX wave pattern when reverse engineered... came back with 829 NDX.

Why 829 NDX you ask???

Wave 1 started early Dec at 1155 NDX, ended at 977 NDX
Wave 2 started late December at 977 NDX, ended Jan 13 at 1104 NDX

SG sat out the first 10 days of January in money market, so I didnt give back any Dec gains. I then jumped in at the top of wave 2 or close, and rode it down. Got out a few days, got back in at 25.70 QQQ and have stayed ever since...

Why??

Wave 3 is normally 161.8% of wave 1. Sometimes 261% on an extension, which is often reserved for wave 5 if it happens, but sometimes in a 3rd wave. Since this is a 3rd of a 3rd of a 3rd.... anything is possible on the downside.

So... 161.8% of 1155-977 is 178* 161.8 is 288 NDX points coming down from top of wave 2

Wave 2 topped at 1104

1104 less 288 is 816 NDX... 816 NDX is about $20.27 per QQQ share

or...

1104 less 466 is 638 NDX (a 261% move) is $15.85 per QQQ share...

Also.. since we hit 938, which is below 977 (dec low), it confirms that the turd wave is unfolding... just taking awhile...

In summary.... we sit tonight at 24.55 or whatever it is....

I know that 20.27 is more than likely a minimal downside target for this turd of a turd of a turd.... followed by a wave 4 corrective move upward.... follwed by a wave 5 ending move downard....

So.... why would I close out my shorts now??? I wouldnt.... If I had powder left I would add.... I already added at 24.91 and 24.11 over last few weeks.... my powder hath run dry.

SG says he can do math well and Im patient. 20.27 divided by 24.55 is 17.5%

17.5% times 200% leverage is 35%.

35% times over 200k invested is over 70,000

I think I'll wait.... and let the Bin Laden and other war crap go on.... Im patient, and the waves keep my fingers off the cover trigger....

How about you?

[BigWave]

All of today's action and my account changed .10...I think I'll take a cue from Pile:

SG- Wake me when we get there

Thanks again for your efforts.

BW

[Ned38]

Here's what I think. Simple chart -TA 101. .My attempts at waves aren't working in short time frames---longer times are ok, but s/t are too confusing for this novice. So, not counting waves here just looking at trendlines I drew 2 weeks ago, I can still afford to be patient a little longer.

Notice the descending downtrend line and how neatly this weeks trading highs conformed to it. Seems to me likely to ride this line down 'till it makes a break for the lower trendline----------prolly creating a wedge that matches up with your wave structure and a rally out of it

What do your QQQ and NDX #s translate to on the COMP?

[wndysrf]

SG:

On the QQQ:

Take the Feb. lows (23.4) and the March highs (25.4).

We could to an ABC up from March lows (24) to 26, which would take us right to the bottom of the gap.

By the way, if your count plays out, do you think the wedge will be complete at 20.50? Enough to go long? Or ride out the rally and stay short??

Things could get really dicey with all these war rumors. We need a couple of harsh earnings warnings to get things going to the downside in a hurry on Monday...

[realist]

Staying FLAT from Wednesday evening on. Sitting on gains from scalping this year so I'm OK. I'll wait and see what happens over then next few sessions. Waves or no waves, Robots gaming over HedgeHogs and so forth, I'll just let them fight it out until the following occurs:

DOW: LONG over 7925, SHORT under 7600 (BIAS = SHORT)
NDX: LONG over 1020, SHORT under 970 (BIAS = SHORT)
SPX: LONG over 855, SHORT under 820 (BIAS = SHORT)

Until the picture becomes crystal clear, I refuse to "gamble" on the trend. I only trade the trend which in the current timeframe is NEUTRAL. Just my worthless 2 pence.

[simple guy]

A few responses

1. Everyone must have their own "risk tolerance" assessed honestly. Mine is extremely high, always has been, probably always will be for the most part. I know when to sit out rallies, and when to be patiently short etc....

I rarely play a rally in a secular bear, but there are clearly times to do so.... I probably will when this 3rd portion of this wave ends.... we shall see.

I've got NAS targets at 1002; I've got QQQ 18.50 ish targets...SG views.... nothing fancy.

I calculated these back on Jan 23 and frankly they havent really changed other than pennies here and there...

The waves still point down, and they harshest part has not even hit.

Lets review

December was wave 1.... 28.55 to 24.XX (forgot number)
Jan 1-13... wave 2.... 24.xx to 27.47
Jan 14-February whatever... wave 1 of 3.... down to 23.30
Wave 2 of 3.... 23.30 to 25.48... youza
3 of 3 is underway and unfolding

3 of 3 is the big one or should be....

3 of 3 will take some weeks to unfold.... at a bare bare bare minimum... it should unfold to $20.92 per QQQ share....

Thats 161.8% of the Decembe wave 1....

Then you would have a wave 4 rally unfolding in 3 waves A B C to probably no more than roughly 24.42 ish....

Then a probably extended 5th wave.... which could unfold in 5 waves down to well below 20....

Thats getting ahead of myself... I focus now on the 20.xx ranges to cover... possibly go long...... and then re-evaluate.

So, until we get there, I have no reasons to cover now....

[simple guy]

In case any of you have covered and have given up... some good stuff from EWI friday night.

I am not allowed to cut and paste without authorization, but lets just say the bottom line is we may get some more meandering this coming week... but they clearly agree with me on the bearish case once this ambiguity is over...

To me, its not ambiguous, I firmly think that we are setting up for a very large decline... stick saves unlikely. My gut is that traders got short on Friday.... very short.....

Committment of Traders report shows them with their largest QQQ short position since April 2001, and the largest of the 3 year bear market.

Also shows small time speculators with their largest long positions in 3 years, or close...

... not to mention SG's non waivering Short position

[simple guy]

Read and heed

http://www.vtoreport...ntiment/cot.htm

Also, strongly advise you read this from Adam Hamilton on QQQ
http://www.lemetropo...022132&pid=2856

Those who keep their heads on straight, will thank me later...

[TGakaTheBigHurt]

SG,

can't find COT report on QQQ and looked all over this gov't site

http://www.cftc.gov/...ccotreports.htm

Commercials less short SP 500 contracts this week but about the same in the NDX.

When you said QQQ commercial shorts were at 3 year highs did you mean for NDX.


Big net Commercial shorts in some industrial metals like copper, that doesn't point to an economic recovery.

Huge net commercial short positions in platinum, silver and gold. Not sure what that means. Probably not pointing to a reinflation any time soon so again no pick up in the economy being signaled there either.

[PileDriver]

Anyone who doesn't think we are in a waterfall better think again

http://www.equitytra...ints=2&refresh=

This is a real natural market basket, not one doctored up by "The Matrix"

The train is still heading south.

WHOOO, HOOOOO !

[coboy]

simple guy, on Mar 8 2003, 08:58 AM, said:

Lets review

December was wave 1.... 28.55 to 24.XX (forgot number)
Jan 1-13... wave 2.... 24.xx to 27.47
Jan 14-February whatever... wave 1 of 3.... down to 23.30
Wave 2 of 3.... 23.30 to 25.48... youza
3 of 3 is underway and unfolding

3 of 3 is the big one or should be....

OK..

Jan 1-13 wave 2 retraced almost 78 % of the wave 1 (December)

Two Different Counts :

1. Jan 13- Feb 13 was the Wave 3 of the big count ===> Wave 4 may retrace 78 % of that move ==> QQQ ~ 26.50

2. Jan 13- Feb 13 was the wave 1 of 3 like you said. ===> Wave 2 of 3 may retrace 78 % of that move ==> QQQ ~ 26.50


That also means the gap is closed..

What am I doing wrong ? Why do you assume wave 2 of 3 ended on March 3 ?


Thanks

[simple guy]

Why on March 3?

Because it was a nice A B C ending pattern and slightly higher than the A wave which is rare. 25.48 was a throwover top off the prior 25.37 ish top on the A wave...

2nd waves are typically A B C 3 wave patterns.... for the Q's to now rise above 25.48 wouldnt fit many patterns I see.

The fact that we had a 5 wave down to 23.96 from there also indicates 25.48 was a terminal A B C ending wave.

The A B C we are doing now off the 23.96 low on Friday is a clear 2nd wave up...

We should see 22.25 as the next low.... thats 161.8% of 25.48 to 23.96 decline....

Lets watch and see... a break of 23.30 certainly confirms my count.... either way, bearish short term.

Will the 26.50 gap get filled? Probably at some point yes, but not right now or anywhere near next few weeks IMO

[Metamucil]

SG,

As a very simple Hurst disciple, my understanding of the chart below (by Mathias of wallstreetonline.de) is limited. Any serious merit to the count?

[WillytheBooh]

Metamucil,

The count is a valid alternative that ranks #3 in my studies. A break above 1353 on the NASDAQ and this count is still viable and then ranks #2. A break below 1266 and for good measure 1251 and the SG count is confirmed or almost. This is the count that we have to all respect though sentiment indicators and other measures and risk reward favour the downside. I have 65% to 35% probability or 2 to 1 for the bottom to drop BUT we must be aware that this count is I REPEAT VALID. Having said that I too am 200% leveraged short for now BUT with very tight stops because 1331 should hold and Wednesday at the latest the cascade has to have started even though Monday is my prefered day for this. There is a measure of risk trading now in a flat trend short term but as some of the vets say the Intermediate term trend is down until otherwise proven. I have not seen real bottoming action yet in high volume accumulation so methinks the reward potential favours the short side positioniung I am taking. If I am wrong then some proftis are stopped out , still a profitable run until the picture clears. Neither wave count has behaved classically even though the patterns may be clear. Now would be a very difficult time to initiate a new position to be sure and if I was not in then I would wait and only follow which ever way the volume breaks as the price may break first in a false frenzy that is not confirmed with volume...

Trade safe
WillytheBooh

[TheKingStool]

E-Waves are not going to help you right now, the Markets are strictly driven by news at this point
A tidier-toder so to speak......Saddam giving up, or Bin &%$%#$%%$@$ captured or dead will cause a Major Bull rally.
That's not in the cards, so what does feed the Markets at this point? E-Waves only see the left-side of the charts and well after the fact at that.
GoodTrades!
King