We are in the midst of the Christmas Season and obviously the Fed's dovish statement helped the markets rally:
>> SnP500 Daily: http://img15.imagefra.me/i5ck/aarc/141u_ad6_ubk5c.png
SnP500 tested the Daily 50ma Support which becomes a great entry for Day-Traders who were able to re-act fast enough to the Fed's Announcement of Dec 18..
The 3rd wave consumed at least 11 days. Thus, if the blue 5th wave is assumed it should consume less time (and be shorter) than the 3rd. Minimum 6 days with 9 days the usual timeframe. But right now, it is rallying already at the 1821 Nominal Target with only 3 days run. IF we consider the minor run down during the FOMC announcement as a 'bad tick' then it is now at it's 5th day rally from the Dec 13 bottom with 1825 Nominal Target and Maximum Limit of 1839.63 for the 5th run.
Profit taking strategy for this one is not easy to formulate. On the one hand, Santa Claus Rally will commence next week thus majority of market participants will be anticipating the rally to continue un-abated.
For short-term traders; the mistrust for everything to go A-OK has been embedded into the psyche borne out of numerous experiences in the past wherein even the most perfect trade can become a nightmare trade.
Thus, the better course of action for those who bought the expected 4th wave down, late last week or early this week, is to take some profits off the table then use trailing stops for the rest. OR simply use trailing stops for all positions for the more intrepid traders. Profit taking for this trade is highly discretionary since there is no high probability wavecount for the moment. A retrace of more than 61.8% of the supposedly 5th wave is a good indication the 1-2-3-4-5 rally has already completed.
For me: I sold half of the YM Day-Trade near the 16,020 equal move target for the March 2014 contract. Then sold the other half today as Dow Jones reached it's i-ii-iii-iv-v nominal target of 16,262 on intraday 30min chart.
>> Dow Jones Intraday: http://img10.imagefra.me/i5ck/aarc/141u_765_ubk5c.png
Note that SnP500 and Compq are still i-ii-iii rally when viewed on 15-min or 30min charts from their lower low Dec 18 bottom. BUT IF the knee-jerk selloff during the Fed Announcement is considered a bad tick (since it lasted only a few minutes) then more likely SnP500 is already a complete i-ii-iii-iv-v rally from the Dec 13 bottom with 1824.75 Upper Range. Since there is no way of knowing which analysis is the correct one at the moment; using tight trailing stops may be a better course of action for the more nimble traders.
Good luck and have a Merry Christmas to all.