I'm Becoming A Believer

A couple of the guru's I follow are still holding out hope of another plunge down and even though I was leaning that way I'm starting to feel the hype and the hope of the sustained rally that I've been calling for.

The low was 666 intraday... close to the 650 target folks were looking for.

I have 1/3 of my retirement in. I do expect one last retracement of about 5% or so in the next few days or week and that's when I'll put the rest of the big money in. This rally will last a few months. It'll be the usual two steps forward, one step back. Nothing goes straight up. But I'll be looking to get out when the Dow approaches the 10,000 area.

A little bit of background on the 10,000 number. Not only is it a psychological line in the sand but the fibonacci numbers (which play a big roll in stock technical analysis) line up with that line in the sand too.

Generally speaking, the high in Oct 2007 on the Dow was 14,165. The low a week or so ago was 6,440. The difference between the two is 7725. Retracement moves are usually 50% of the move. Half of 7725 is 3862. Add that to 6440 and you come up with 10,320. That's the target.

Recap: Primary Wave 1 was the move from the Oct 2007 peak, to the recent bottom. It lasted 17 months and was about a 60% move down from peak to trough. Primary Wave 2 has just begun and should last 4-6 months peaking around 10,300. Primary Wave 3 will be UGLY. Wave 3's are usually the ugliest, longest and most devastating.

I'm a believer of the Elliot Wave theory. It's not perfect and it doesn't predict exact moves in advance, but it's amazingly accurate in the grand scheme of things. It's proven itself to me and I want to help you preserve your money.

I'm ready for us to start moving up for a while. Let's make some money.