Slope of Hope with Tim Knight

[Spock]

Fujisan here.

SPX Price Projection:



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:




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




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




GS after the earnings



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.