September Morning; High-noon in October; and Midnight in November?
This is/was the Daily/Intraday short-term analysis:
The A-wave run down took 4 weeks to unfold. It is a 5-wave thus the highest probability pattern to form is a Zigzag down with the B-wave (a-b-c up) consuming 6 to 8 weeks and must not retrace more than 61.8% of the A-wave for an A-B-C pattern to form. Thus the B-wave up should complete within October and the C-wave down in either late October or November (late November to early December if the B-wave consumes 8 or more weeks to finalize).
* IF and only IF SnP500 retraced much more than 61.8% of the i-ii-iii-iv-v run down and goes down again = then higher probability a 1-2-3-4-5 run down is going to happen instead of a Zigzag Down.
For the Medium-Term Analysis the 4 potential scenarios initially highlighted last May 2013 and was reduced to 3 (by process of elimination) remained as they are as of July 2013.
<< SnP500 Conservative Scenario: http://g10.picoodle.com/ltd/img10/5/8/7/aarc/f_141u_f52_ubk5c.png
<< Dow Jones Aggressive Scenario: http://g10.picoodle.com/ltd/img10/5/8/6/aarc/f_141u_b72_ubk5c.png
<< Russell2000 Super-Duper-Scenario: http://g15.picoodle.com/ltd/img15/5/8/14/aarc/f_141u_5db_ubk5c.png
Based on the Intraday (and Daily) chart performance; Dow Jones Aggressive Scenario becomes the highest probability. But then we simply do not know what the future might bring.
- IF a low-probability 1-2-3-4-5 rally happens on Intraday and/or Daily Charts then SnP500 Conservative Scenario might still be in progress; OR the R2K Super-Duper Scenario started to kick in; OR it can create additional (more complex) scenarios better not to be speculated right now in order to prevent Analysis Paralysis.
- IF a low-probability Spiral Meltdown on Intraday and/or Daily Charts actually happens then the SnP500 Conservative Scenario becomes the highest probability study.
* There is no need to update the weekly charts (yet) since practically nothing has changed to substantially change any of the above 3 scenarios. Highest probability, however, is that SnP500 and Dow Jones are not going to achieve their nominal v' and v-th targets on their weekly charts and instead have already topped out in August 2, 2013.
First thing first. I trade based on the highest probability thus the main objective of making a trading plan is to capture that scenario. However, sometimes the highest probability is not very high or only have about 60-65% success rate such as for Bull Flags and Inverted Head and Shoulders Patterns; then trading strategy should include some provisions for the other 35% to 40% failure rate. Other patterns have more or less 65% success rate and some proprietary trade setups can achieve 70% success rate. More than 70% being touted by others are subject to much closer inspection since more likely they fudged their trading results in order to achieve extremely high success rates.
The highest probability scenario is when a 3rd wave extends then there is 90% probability the 4th and 5th waves are going to form. It happened when SnP500 was able to reach 1679 in May 2013 thus I decided to over-leverage my account in June in order to capture the 5th wave rally. Unfortunately, SnP500 is not able to reach the Nominal Target of 1768 in one shot and instead went down i-ii-iii-iv-v on intraday and daily charts after reaching a 1710 high in August 2. The 5-waves intraday down, in turn, is what is needed to provide the necessary initial run down to sustain further run downs. The major question is whether SnP500 will retrace less than 61.8% of the run down raising the possibility of a Zigzag down - but not necessarily eliminate the possibility of a 1-2-3-4-5 run down - OR SnP500 retrace more than 61.8% thus raising a 1-2-3-4-5 run down to the 1500 area the highest probability.
Short-Term to Medium-Term Strategies:
- I bought some SSO at $81 to $82 range (then sold half at $83.07) in order to trade the a-b-c pullback up on intraday and daily charts;
- Will try to go short ES and/or buy SDS on an intraday a-b-c corrective rally in order to protect at least 1/3 of my medium- to long-term portfolio against a possible 10% to 20% correction;
- I am still holding 1/3 of June 2013 buys, as a Free-Trade, and will sell at least 1/3 of that remaining positions on an a-b-c pullback up.
Medium-Term to Long-Term Strategies:
- Still holding 1/3 or October 2011 bottom buys and most likely am going to keep them as long-term holds.
- Still holding about 25% of June 2012 bottom buys and don't know what to do with them (yet).
- I have been trimming my Long-Term Portfolio since late July to harvest profits on patterns that look like 1-2-3-4-5 or A-B-C rallies from the March 2009 bottom - using the monthly chart. Also closing those positions that have underperformed considerably since March 2009.
For those who bought some or more positions based on my Instablogs and/or Comments of the past - and still holding some or all positions - those are what I think are the better trading strategies at this moment in time = Based on 80% probability, on the Monthly Chart, that SnP500 and Dow Jones are going to have another Secular Bull Market Rally AND 90% the blue iii-rd wave on Weekly Charts will be followed by the iv-th and v-th waves since the iii-rd wave is already an impulsive extended wave.
>> SnP500 Long-Term View: http://g15.picoodle.com/ltd/img15/5/5/2/aarc/f_141u_c1e_ubk5c.png
The long-term bullish analysis was initially only 65% probability at or near the March 2009 bottom toward the Triple Top Resistance of 1576. It became 80% probability when SnP500 was able to reach 1576 in April 2013 = Before the September 2013 deadline. Final long-term objective is to sell most, if not all, positions once the Secular Bull Market Scenario becomes more or less 100% probability with 18 to 26 years timeframe from the March 2009 significant bottom OR if and only if a sudden major meltdown, that practically compromises the long-term bullish view, happens = the 20% probability.
Sept 5 Addendum:
Compq is the Lone Ranger:
>> Compq Bullish Pattern: http://g10.picoodle.com/ltd/img10/5/9/5/aarc/f_141u_14e_ubk5c.png
Compq can start another rally or it can suddenly collapse in order to form a Non-Limiting Expanding Triangle.
Non-limiting triangles are extremely rare with the last one, of same size, happening in Aug 2009. Thus not worth trading unless and until it actually happens. For a NL-Triangle to form Compq should immediately collapse toward 3529 before going into a Vertical Thrust Rally. Minimum 2.62x the e:3 wave is the upside target IF it actually forms.