Slope of Hope with Tim Knight

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Slope of Hope with Tim Knight Empty Slope of Hope with Tim Knight

Post  Spock on Sun Oct 18, 2009 4:17 pm

Fujisan here.

SPX Price Projection:
Slope of Hope with Tim Knight 6a00e00989822288330120a5f1ea2c970b-500wi

Remember the basic Elliott Wave Theory of "W3 being driven by the
institutions and W5 being driven by the retail traders"?? This entire
rally was being driven by the institution (which shall not be named)
and the government pumping the money into the market, and not many
people were able to participate in this rally. This is a perfect set up
for "one more leg up" by the retail traders who did not have a chance
to participate in the rally.

Three Peaks and Domed House

Now, I'm also exploring the possibility of the current price pattern
to be "Three Peaks and Domed House". According to Bulkowski, this is a
combination of "Triple Top", "Rounded Top", and "Head and Shoulder"
pattern which looks like this:

Slope of Hope with Tim Knight 6a00e00989822288330120a5f1ea4f970b-500wi

Tim's favorite 1938 pattern is identified as "Domed House and Three Peaks",
according to Bulkowski.

Slope of Hope with Tim Knight 6a00e00989822288330120a5f1ea81970b-500wi

My good trader friend, Zig Zag, was also doing a similar market study and
kindly agreed to share his 1978 comparative study as follows:

Slope of Hope with Tim Knight 6a00e00989822288330120a648fa73970c-500wi

GS after the earnings
Slope of Hope with Tim Knight 6a00e00989822288330120a5f1eaec970b-500wi

As discussed above, the key here is not to get into the short
position overly aggressive. I see the remaining Nov/Dec time frame
more like a consolidation period before the market makes another run up
toward mid 2010.

If you missed a good entry point on Thursday, you can still wait for
a retracement for a better entry. If it didn't come back, and
continued to sell off, you could get in upon the breakout of the
neckline. If you still miss the trade, well, there is always another trade.

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