While I am content to ride the trend as far as it will take us, I thought it would be prudent to mention the other side. You can go to Elliott Wave International and check out free week (starts today 9/16) to see the short term updates for Europe and Asia. They are calling for some markets to be topping in potential ending diagonal patterns. I no longer subscribe to the US Short Term Update so I don't know what they are saying about US markets, but having been a long term subscriber, I feel confident they are calling for the ending diagonal pattern in the US as well. If I am wrong, someone please let me know. Anyway, at the same time they are showing some of the Asian markets ready to blast off in wave iii of 3 of C. I realize that all world markets are not synchronized, but somehow the thesis just doesn't sit well with me. It may very well be that we get one more down up sequence to finish an ending diagonal and fall hard, but I doubt Asia is going to be blasting higher with the US falling apart.
I still think it would be prudent to take some profits over the next few weeks in case we do get a sharp correction. There is no reason to over leveraged going into the middle of October, but I will still be committted to the long side until I see some definite price action that changes the picture.
I took partial profits in LVS today, long from 11.70 and out part today at 18.47 on reversal. I probably should have got out around 20, but I am still happy.
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3 comments:
"ending diagonal patterns"
SPX broke thru the upper trend line today; so the diagonal pattern would seem to have less validity.
DJTA did the same even more forcefully last Fri & i posted the following comment elsewhere Monday: http://www.timingthemarket.ca/techtalk/2009/09/14/tech-talk-for-monday-september-14th-2009/
dave Says:
September 14th, 2009 at 8:34 am
“The Dow Jones Transportation Average added 211.66 points (5.62%) last week. Intermediate trend remains up. A rising wedge pattern has formed.”
IYT (DJTA etf) gapped above rising wedge upper trendline Friday. That’s near-term & short-term bullish to me.
Overall I agree, however, we do have to be on guard for an overthrow. If that were to happen we should see a sharp selloff that violates the August low.
"...an overthrow"; 'b' waves; false breakouts. Geez, all those are a bit unfair like women wearing make-up.
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