Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.


Now that so many analysts have failed to predict where this rally would have topped out; perhaps it is the right time to start speculating for the fifth wave:

I'll use Dow Jones as a template this time:


That's the Trade Setup if you want to Trend Trade this rally. Use the lower trendline for entry or use a breakout entry - or both.

There is another way of counting the waves from the Nov 25 bottom which is also a high probability with March 6 as the iv-th wave bottom. v-th target for the alternate wavecount has a Nominal Target Range of 13,760 to 14,040 with Maximum Allowed Run Rate of 14,395. I don't know which one is correct or all of my analyses are wrong. Let the markets decide.

Unlike bottoming patterns; topping patterns have the tendency to slowly drift upwards (trying to defy the law of gravity) then suddenly drop like a rock. So be careful out there.

On the monthly chart:


Among Flat Patterns, Expanding Flat is my favorite since it has higher success rate when compared to other flats.

Majority of Dow 30 stocks still got upside potentials. Some with lots of upside potentials on their daily charts - since many of them have already taken a pullback during the last several weeks.

Good Luck