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  • Taper Turmoil 0 comments
    Jun 21, 2013 9:52 AM

    Taper talk gone from bad to worse.

    Which means Panic Selling not only in the US but Global exacerbated by the Credit Crunch in China.

    Time to buy?

    ----------------

    We still got two high-probability scenarios:

    #1. Dow Jones Aggressive EWA: http://img15.imagefra.me/i566/aarc/141u_392_ubk5c.png

    #2: SnP500 Conservative EWA: http://img10.imagefra.me/i566/aarc/141u_1cd_ubk5c.png

    The aggressive scenario assumes more or less 8.9% Pullback in about 9 weeks of consolidation range (10% hopped for by many traders/investors) while the conservative scenario assumes more or less 3.8% Pullback in 3 to 6 weeks (5% by some). Right now SnP500 has gone down 6.11% from top to yesterday's bottom in 3+ weeks consolidation range with lower high lower low:

    >> Dow Jones Now: http://img10.imagefra.me/i56l/aarc/141u_df8_ubk5c.png

    >> SnP500 Now: http://img10.imagefra.me/i56l/aarc/141u_66f_ubk5c.png

    Obviously, with Dow Jones and SnP500 breaking hard below their 50ma Supports majority of Day-Traders have been stopped out and are now bearish.

    From the point of view of Elliott Wave Analysis; the pattern matters more than the technical indicators used by TA Traders:

    >> SnP500 Intraday Analysis: http://img15.imagefra.me/i56l/aarc/141u_bdf_ubk5c.png

    As illustrated on intraday chart; the A-B-C pattern is now acceptable but not necessarily complete. A rally above the upper down-trendline resistance will give it 80% probability a new high will happen.

    =========

    Trading Strategies:

    As indicated on the last Instablog, my trading strategy was buy the bottom of the A-wave then sell half on the B-wave up. Hold the other half just-in-case the C-wave down proved to be a higher low.

    I sold half when Dow Jones made the potential 'Kiss of Death' then hold the rest with trailing stops. SnP500 (and Dow Jones) decided to go lower low and so the trailing stops for the other half got stopped out with tiny profits.

    * I bought some SSO early today for a potential rally toward the 1702 Nominal Target for the SnP500 if a v-th wave happen (on Daily Chart). A better (safer psychologically) strategy is to buy when SnP500 rallies above the A-wave level (above 1599.16 level) then use the last lower low as the hard stop loss.

    Addendum: 1:09 pm

    SnP500 now tested the Daily 100ma support approximately near the 1576 all-time-high printed last October 2007 and was taken out last month:

    > SnP500 Daily Chart TA: http://g15.picoodle.com/ltd/img15/5/6/21/aarc/f_141u_6f4_ubk5c.png

    I bought some more SSO when SnP500 (and SSO) touched down into the 100ma Support.

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