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The DJIA has dropped from an intraday high of about 11900 on 1/14 to an
intraday low of about 10000 on 2/22. During the course of this drop, the
DJIA crossed below its 200 day moving average at 10880 on about 2/9 and
violated a long term trend line defined by the October 98 low and the
October 99 low on 2/10.
Making the leap of faith that we have put in an intermediate term bottom at
10000, a 50 % retracement would take us back to 10950 while a 38 percent
retracement would take us to 10730. There is a great deal of congestion
between 10730 and 10950 and this along with the 200 day moving average and
the previously violated trend line should provide significant resistance. I
am targeting the top of a rally at about 10750 for these reasons.
I have only recently begun studying Elliot waves and through a possible
misapplication of that theory project a low following the so called sucker's
rally of 9536 which I calculated by subtracting 1.618 * 750 from 10750.
This level is just above an area of congestion that formed in early 1999 as
well as the market top in July of 1998 which adds further support, if you
will excuse the pun, to my downside target. If this level does not hold,
further misapplication of the Fibonacci sequence yields a downside target of
8786 which I calculated by subtracting 2.618*750 from 10750.
I already know that a little bit of knowledge is a dangerous thing, but any
other Elliot wave coaching regarding the DJIA will be appreciated. A chart
is attached showing my wave count.
Thanks,
Dan
>From: "Earl Adamy" <eadamy@xxxxxxxxxx>
>Reply-To: eadamy@xxxxxxxxxx
>To: <realtraders@xxxxxxxxxxxxxxx>
>Subject: [RT] Deeper correction ahead
>Date: Wed, 23 Feb 2000 19:43:43 -0700
>
>My primary NYSE model, which was already in sell mode, is now signaling
>a larger and longer correction and this is confirmed by the hi/lo and
>a/d volume models. NASDAQ is in sell mode and I am suspicious of today's
>rally. Anyone looking at interest rates via TBonds should have a look at
>the corporate yield curve or the prices of corporate bond indexes across
>short/intermediate/long maturities- in short corporate rates are rising
>across the board and show no signs of abating.
>
>Earl
>
>----- Original Message -----
>From: "Earl Adamy" <eadamy@xxxxxxxxxx>
>To: <realtraders@xxxxxxxxxxxxxxx>
>Sent: Tuesday, February 22, 2000 7:59 AM
>Subject: [RT] Re: chek out abix/sp sell off
>
>
> > Many are looking for a big rally here now that we've had a nice little
> > decline. My work suggests that the bottom is not in. Could be a
>tradable
> > rally from 1330 area beginning on the 23rd but I don't believe such a
> > rally can exceed the previous pivot high at 1450.
> >
> > Earl
>
>
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