aarc's  Instablog

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  • Cow Dung? 0 comments
    Apr 10, 2012 3:46 PM

    Obviously the more recent possible Trend Trades using a Triangle iv-th wave scenario for Dow Jones failed miscerably and possibly the potential Expanding Flat for SnP500 daily chart is also a failure:

    - img12.imagefra.me/i544/aarc/12xv_0c4_ubk...

    - img13.imagefra.me/i549/12xv_7ba_u0.png

    That's the peril of Trend Trading. A possible reversal may happen any time that is why tight stops are used extensively when trying to chase a rally (or a meltdown).


    These were the longer-term Scenarios that I have published in Instablogs and Comments during the last few months:

    For the Bulls:

    - img38.imagefra.me/i53g/aarc/12xv_e33_ubk...

    - img38.imagefra.me/i53j/aarc/12xv_f8b_ubk...

    - img38.imagefra.me/i5al/aarc/12xv_af2_ubk...

    For the Bears:

    - img38.imagefra.me/i539/aarc/12xv_5a6_ubk...

    Notice that I used 1420 area as possible turning point for the Bear's Monthly Chart? It is because 1420 is the ideal candidate for an A-B-C corrective rally on the Dec 19, 2011 Daily Chart.

    So far; this was the Main Chart I used to project upside targets:

    - img38.imagefra.me/i5cm/aarc/12xv_068_ubk...

    That was the trade of Dec 19, 2011 that clarified short-term to medium-term wavecounts. A i-ii-iii-iv-v rally has a Nominal Target of 1420 which Spx was able to achieve. However, Spx will have to keep rallying past 1420 and into at least 1460 in order for a 1-2-3 wavecount to become more than 50% probability OR rally to at least 1511 in order to have 90% probability the 1-2-3 will become 1-2-3-4-5. A complete 1-2-3-4-5 rally has a Nominal Target of 1594 discussed several times in the past for the Swing Trades of Aug 8, Oct 4, Nov 25, and Dec 19 buy entries.

    This is SnP500 NOW:

    - img13.imagefra.me/i54a/aarc/12xv_d2d_ubk...

    Obviously, finding a high-confidence wavecount for the potential i-ii-iii-iv-v rally is extremely hard to achieve. The rally from Nov 25 bottom is either a i-ii-iii or a complete i-ii-iii-iv-v. Time will tell.


    I sold some more of the Swing Trades (bought last year) near the 1415 target as indicated on 'Odds and Oddities' Instablog and was able to reduce account holdings to 101% (90% Portfolio + 11% Swing Trade).

    For the meantime; the objective is to be able to ascertain whether this latest run down is either a iv-th wave or a 4th wave. A iv-th wave ideal time line is 12 to 16 days since the ii-nd wave consumed 10 days. A 4th wave time line is 25 to 33 days since the 2nd wave consumed 20 trading days. Too hard to know right now which one to trade for a New Swing Trade. OR a possible Meltdown is already starting to happen based on the Bearish Scenario. Nobody knows for sure.

    For now, Wait and Watch is again the better course of action.

    ** For Conventional Traders: Their SOP Trading Strategy is to go long if SnP500 can go back and rally above the daily 50ma.

    - I am not discounting a possible rally toward the 1460 to 1530 wide target range if SnP500 suddenly is able to recover above the 1371 all-important support/resistance level and start rallying strongly.

    Trade with Caution if you are itching to make a few more bucks out of this rally.

    Be sure to use Trailing Stops for those stocks/ETF bought during the bottom calls of Aug 8, Oct 4, Nov 25, and/or Dec 19. As earlier suggested: IF we go into a Secular Bull Market Rally, most likely we will never see the 1075 bottom of Oct 4th, 2011 again in our lifetime.

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