The wave counts are basically right now we're in a weekly 3rd (ending it) and about to start a weekly 4th wave rally. That takes us into summer and then the final 5th wave low in Oct-ish.
The severity of that low will be determined on the economic news.
The daily charts though have bottomed and the hourly charts are now ending with their 5th waves starting to the downside.
That downside will be between 650 and 740. The strength of the market will be how it reacts at those upper 700 levels.
The good thing is the strengtt of the Russell and Semi's.
With those clearly leading, the market is poised to run heavy on this rally. Expect BRCM to be north of $22. The Russell to possibly 500+.
So, the trade here is to average slowly into this next decline that will probably start tomorrow. The next two weeks will probably be down to end this.
I think it's leverage time. Start buying the TNA call options for JUL.
We bailed on the Aprils for a 40 to 60% profit depending on where your entry was. But this time I think it's getting better. Those calls should be targeted between ($10 calls) $4 and $5. Today's rally was on very light volume. So, the previous day's key reversal down is probably still intact. However, these indexes are showing a weekly key reversal up from last week. What we get now will be simply a retracement of that, not a violation. So, again, start to buy slowly the May TNA $10 calls. Maybe 1 or 2 a day.
