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Long Live The King Part II

Last time I made the Long Live the King Instablog was in Feb 8, 2012. Before that the rally from March 2009 to April 2011 was still a valid a-b-c corrective - until proven wrong of course. In Feb 7, 2012 Dow Jones double topped at 12,876 first set in April 30, 2011 thus making a confirmation the run down from Feb to Oct 2011 was a Complex W-X-Y Corrective and thus invalidated the Corrective a-b-c Rally Scenario concocted by the Bears.

This is Dow Jones now:


- DJ Advanced TA:

- DJ Short-Term Analysis:

Dow Jones is again the King of Major Indexes practically able to reach a high-probability Extended iii-rd wave Rally and thus is can be considered to have at least 89% probability the green i-ii-iii-iv-v is going to happen.

Those charts were published yesterday and at the last Instablog. They remained valid for the near to medium-term future - until proven wrong, of course. Today DJ is still about 40 pts below the extended target - about 0.27% short (yet).


>> SnP500 Weekly Chart:

For the SnP500 the 2x Positive Reversal Nominal Target (that I highlighted in Oct-Nov 2011) is 1666. 1741 is the Nominal Target for a conservative blue i-ii-iii-iv-v rally.

* I use a higher benchmark for Dow Jones since it is already well ahead of SnP500. There is a third scenario using super-aggressive benchmark and thus has far higher targets than what are shown in DJ and SnP500 weekly charts - but of lower probability (published last year - forgot which Instablog). Under that scenario; the bottom of June 2012 becomes the blue ii-nd wave. For the meantime, it is more practical to keep tab of the conservative benchmark for SnP500 and/or the aggressive benchmark for Dow Jones.

>> SnP500 Intraday:


Trading Strategies:

With the Dow Jones already a high probability green i-ii-iii on the short-term to medium-term basis; the better course of action is wait for the iv-th wave to unfold - then try to buy the bottom of the iv-th wave for a Swing Trade to the upside. Since the ii-nd wave consumed 9 weeks then we can assume the iv-th wave should consume 9 weeks or more depending on whether it will become a negative correction (with lower high/higher high - lower low pattern) or a positive correction (with higher high - higher low pattern).

Right now; for those who would like to venture Trend Trading the Intraday price actions; the SnP500 is much easier to read than either Dow Jones or Compq. But then, we are cycling again from certainty to uncertainty - with chart pattern now as clear as mud. Buy when the pattern becomes clear as clear sky again in the next few to several trading days. For those who bought the bottom of the ii-nd wave a few days ago, it can be considered practical to sell some long positions at or near the 1626 iii-rd wave target - as a protective trading strategy.

* This Instablog is written more to commemorate another run rate performance milestone for the Dow Jones.