All the three Indices closed with 5 consecutive gains in a row in the last 5 trading sessions. During this period, Dow put on 2.8%, S&P gained 2% and Nasdaq is the biggest winner with positive 4.8%.
As shown above, both S&P and Nasdaq have broken their respective short-term upper resistance lines and were pulling away indicating a clear breakout. However until the closing of Friday trading, Dow has yet to break its upper resistance, it is only a matter time before it follows the path of S&P and Nasdaq because ultimately the chart patterns for all the 3 indices have to almost similar.
Assuming Dow can break its upper resistance line, then Dow is forming the pattern of scenario 3 as mentioned in my recent post and as shown below.
In my previous post, for the current major wave (III), for my own convenient I have assigned the waves as 1-2-3-4-5-6-7-8-9-10 and that Dow is going for wave 11, 12 and 13. In order to provide a uniform wave count for all the 3 indices, I have replaced the wave count of 1 to 10 by sub-wave i-ii-iii-iv-v/wave 1-2-3-4-5-6 and projecting Dow to go for wave 7, 8 and 9 to complete the major wave (III) as shown above. Wave 1 is the extended wave.
Similarly, Nasdaq has 5 waves except that its extended wave is wave 3 instead of wave 1. It is moving ahead to form wave 7, 8 and 9.
Surprisingly S&P's wave count is closer to Nasdaq than to Dow with extended wave in wave 3. Let's wait and see whether scenario 3 is the correct one. If so, this major wave (III) can run until Chinese New Year. If 2010's Tiger is the same as the previous 3 tigers as mentioned in my previous post, them this wave (III) can possibly be the mega wave B, this is what Robert Prechter has been talking about. See chart below.
If really this is the case, get out at B and buy in at C can be very juicy, may be Bank of America will go down to US$2 again, Fannie Mae to less than US 30 cents again and Las Vegas Sand to US$2.00
No comments:
Post a Comment