Friday was a curved ball. Who got fooled by April 1-st is still unknown and undecided yet.
This is for those who do not surrender easily:
It assumes we have an ideal rally with no gap down and have no prolonged consolidations on the 5min or 15min charts on Monday.
SnP500 has completed 2/3-rd of the nominal target profit potential for the Alternate Wavecount Scenario on the daily chart. With the pullback last Friday, there is now 40% left. Nominal Target is 1383 - which corresponds quite nicely if this Chasing Rainbows Scenario performs the ideal (nominal) run rates for the remaining sub-waves as illustrated.
This was SnP500 daily as of March 29:
Maximum allowed run rate is the 1419 target. Therefore, there is still a 50% potential profit generation left for the super-bulls if they can possibly put their acts together perfectly.
But since the stock market is what it is; expect something might go wrong along the way.
IF we go down early next week; then this is for the 240min Potential Inverted Head and Shoulders as of March 30 (still a valid scenario but adjust right shoulder and neckline as necessary):
Making money at the stock market is not easy.
It means ... $ = ^v^v^ +/- #@*&!.
Chasing Rainbows is not easy to get since extended fifth occurrences are few and far in-between. It reminds me of the old Beatles song "Lucy in the Sky with Diamonds". Traders are dreamers, so we chase diamonds (and/or Lucy) up in the sky where a single mis-step can mean great loss of capital when the trend unexpectedly reverses and the trade is poorly executed.
Ideal cases of Potential Continuation Inverted Head and Shoulders are also not a common occurrence as compared to simple A-B-C BullFlags. Hence, not much hope in there either. But then again, we almost always hope for the best - just be prepared for the worse.
Planning and managing our trades can mean the big difference whether we make money or lose some.
For the Chasing Rainbows: It is still ok if SnP500 completes the 5th wave down on the 5min chart without getting truncated (read Friday's Instablog "At Wit's End") since the Y-wave of the W-x-Y can be a simple c-wave, a zigzag, a double zigzag, or even a triple combination down (the latter are scary and much more susceptible to a Death Spiral). Nominal target range for the 5th down on 5min is 1329.91 to 1329.07. Maximum allowable is 1,328. So, if Spx breaks hard below 1328; then the possibility of a Death Spiral will become very high. If SnP500 can't mount and decides to consolidate well below 1336.21 on Monday = better abandon the trade since more likely it will go down later in the day for lack of action. Don't try buying a massive gap down since something very bad must have happened before the open. Don't chase a massive gap up. Wait for a pullback since the iii-rd has a maximum allowable run rate as noted on the chart. Late buyers face considerable risk if and when the iv-th for 5' goes back below the Daily Chart Resistance level of 1344 after breaking out to the upside; a buy on re-entry above 1344 is preferable since there is a definitive stop loss. Try not to play ordinary stocks. This is the last inning. SPY or SSO are ok.
This trade is more a cerebral exercise and/or a test of trading skills for the more aggressive intraday swing traders rather than a quest for huge profits. Heaven for scalpers and daytraders if they get lucky.
There are many other possibilities. I simply cannot 'see' them as high probabilities (yet).
As always, be careful out there :-).
Gold is an example of a very successful Cont-InvHnS and a Potential Extended 5-th on the weekly chart if the v-th of the 5-th goes into an extended rally:
Who knows; Gold may even follow the footsteps of Oil that over-extended it's 5th in 2008 to $147.27 or may even become the 'Tulip Mania' of the 21st Century (a super bubble). Or it may just proved out to be an ordinary 1-2-3-4-5 and then go into a Super-Meltdown for 20 years or more.
Monday 2:26 pm Update:
Compq broke above the 2nd wave thus the 4th and 5th failed to form. Same with SnP500 brealking above 1336.31 after the open. The whole run down last Friday's afternoon become an a-b-c with the c-wave extended and over-extended for Spx and Nasdaq, resp'ly.
Highest probability at the moment is Triangulation at the top of the 30min or 60min chart.
BUT if Dow Jones can close above it's Daily Chart Double Top Resistance of 12,391 today; then traders will most likely be scampering early morning tomorrow to buy stocks.
The Trio has now a good chance to rally for the rest of the afternoon if Spx can go straight for 1333 or higher. There is still a potential missing minute v-th wave down on 5min chart - so still iffy until 1333 got taken.