Monday, March 16, 2009


Looks like 7300 is the top of A.


  1. FDR

    you were looking for a zig zag to 7900

    is this the top of the zig, and then zag to 7900, or is this the level in which we resume to uncharted waters down to new low's.


  2. Maybe this helps:

    Zigzag: Zigzag patterns are sharp declines (or advances in a bear rally) that substantially correct the price level of the previous impulse sequence. Often wave B (the counter-trend wave of the ABC pattern) is the shortest relative to A and C. In zigzag patterns, the sequence may double or triple up until the price correction target is achieved. Zigzags internally subdivide 5-3-5 as follows: Wave A (5-waves, motive), Wave B (3-waves, corrective), Wave C (5-waves, motive).

    From here -


  3. Russ,

    Thank you for that

  4. the european indices, Dax and Cac 40 dont have much space to the upside. It is very likely that we have a top now, and that we are on our way to the 6000 level for the Dow

  5. Definitely possible. C doesn't need to top A in any case, so the minor high could be in.

    Sell and hold remains the long term strategy for aggressive traders, conservative investors should continue making a killing in 100% cash.

  6. "you were looking for a zig zag to 7900"

    I think you have me confused with someone else.

  7. Fdr for a non technical person does it mean that we are at a intermediate top in Dow and will move downwards now but still hold 6500 levels? And then move up for some months to around 7900 and fall massively to dow 800 from there? Please clarify this.

  8. It means we have very likely counted a complete minor A top. B Should follow as a minor wave down, then a C wave back up but not necessarily higher than we are now.

    EWs give you great perspective in the long term, short term waves have to be counted in real time and leave a lot of wiggle room if you try to optimize your pocket change.

    It is a lot like the Uncertainty Principle, where the finer you try to slice it, the less you know. That is why those who are inexperienced in successfully managing day-to-day/week-to-week risk should have followed my advice to go 100% cash at 14K+, and should still do so.

    In the big picture, we are pacing out a multi-century top that will take decades to complete. Within those decades, there will be raging bull market countertrend rallys, some likely lasting years, with an overall trend to my Dow 800 long term target.

    All of this is insignificant to the non-technically inclined, who should be 100% cash/Treasuries.

    To reiterate, "buy and hold" is dead, probably for your lifetime unless you are a pretty young reader.

    "Sell and hold" using dollar cost averaging to increase your cost basis could result in more money than a 100% cash position assuming:

    1) You are a highly disciplined trader that understands how to self-manage risk
    2) The market does not systemically collapse with you in it

    Most pro traders cannot average 100% per year, but a cash position will avg that return for anyone, technically with no risk.

  9. Thanks for the detailed explanation Fdr.

  10. We have a double zigzag on the dow, just placed a top in the 7400 zone, which is also the 50% fibo from the decline from 8300-6500

  11. The first poster got the 7900 level from a prior post of yours, FDR. To wit:

    "Given our recent spike in volume, we can expect a 4th wave to develop upward shortly. A 4th wave retracement, by genetic rule, can go as high as the previous 1 (7,900). I do not expect that level of retracement in an extending 5th, but the guideline of alternation implies that since 2 was sideways, 4 will be an "unexpected" sharp zig-zag to the upside, before resuming its descent into uncharted depths."

    Can and will however are two entirely different things.

  12. FDR This is Leonidas from MW. I am not good with technical analysis but this guy below says we most likely completed sub wave 4 and going into sub way 5 leading us to SPX 660-640.

    Let me know what you think.


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