04/25/12 – Rally – How Big Will It Be ??? © ™

MY CHARTS – Bookmark this link.


Previously I had stated:

The overall trend in the market is down for the next several weeks/months.  That will remain my view until otherwise stated in the category “SELL/BUY ACTION UPDATE”.  BUT the overall downtrend doesn’t preclude the possibility of a good rally.

Now I’m questioning whether the entire move is complete OR whether we have only had one step down.  If the correction is complete, this means I have made a mistake on the extent of the decline that began on April 2nd.


I published the following answer to a question I received today, and it reads as follows:


I’ve resisted “PUBLISHING” an update to my blog since Monday afternoon.  I finished an update on Monday and didn’t publish.  I finished an update twice on Tuesday and didn’t publish.  On Wednesday I’ve capitulated and I’m writing the blog update presently.  I’ll publish it later today.  

I have already put the new wave count on chart #10.6 on page 1.  MY CHARTS is the place to see my thinking before anything appears in the blog.

I bought several hours before the close on Tuesday.  I bought after seeing a very nicely formed 3 step decline take place after the Monday rally.  I couldn’t resist it and I bought.  These small 3 step declines that follow a rally from a ‘possible” bottom have special significance and I must remember to write about it in today’s update.  I had originally thought it could be a short term scalp with the “possibility” of more.  As the market has persisted in its rally, I have admitted to myself that I have made a mistake on the wave count.

I believe the correction we are undergoing (or underwent???) is one degree less than I had originally thought.  It’s not an intermediate term correction but it’s likely short term.  That basically means the depth of the correction will not be much worse than we have already seen and it won’t last very long.  In fact it “could” be finished presently.  Whether it’s finished I am unsure but more on that later as I need to write the blog and rethink this idea completely.

We are nearing the highs of April 17th and this would be a good place for the market to have a consolidation period.  I’m watching this area closely for more clues.  

But you’ve got the scoop and you’re reading it first.


After I have thought this through carefully (that happens during the writing process) I may have a different viewpoint on some things than what I have written here.  More later.”


I smelled a dead rat on Monday (4/23) and my gut told me there might be something wrong with my original prediction.  I wrote this blog update on Monday afternoon and then didn’t send it.  I continued writing again earlier Tuesday after I had bought the futures and still didn’t send it.  After the market closed Tuesday, I continued writing because we MAY have completed the correction that began on April 2nd.  But I still didn’t send it.  Now it’s Wednesday and the market is closed.  I finally am sending the Monday update after admitting that I have screwed up the wave count.  It’s not the first time that I have messed up the wave count and it won’t be the last.

Most of the following update has been written since Monday but I have continued to add to it each time I thought I was going to publish.  It has been written once (Monday) and added to 3 times, twice on Tuesday and once today.  Parts have now been deleted as being out of date.  But now I’m going to publish it and be done with it.  “Out, damned spot! out, I say!”

My only excuse that I didn’t publish on Monday is that I didn’t want a whipsaw blog update.  One that I published and then retracted a couple of days later.  In my longer term viewpoint, I thought I was correct, otherwise I would have published quickly.

Hopefully this isn’t the act of capitulation made in the last moment of a market move.  But all of this is qualified on the continuation of the rally.  We must break through the April 17th highs and continue on past the 62% retracement level.  Next stop would be the April 2nd peak but there will be zig-zags along the way.

04-25-12 SPX 15 MINUTE BARS


Presently we have a rally underway.  After completing a small 3 step decline around noon EDT on Tuesday, we rallied and broke through the Tuesday morning high.  This indicated that we were in step 2 of the rally that began Monday morning.  The next point to watch is whether the market can better the highs made on April 17th.  Presently the futures are on 2.5 points from breaking the highs of 4/17.  If this happens, a rally of significance could be underway.  Best case scenario is that we have completed 3 steps down since April 2nd and an attempt at new highs is underway.

Tom McClellan has an interesting article in his latest report.  He states that an indicator, which he follows indicates that the first quarter GDP numbers will be much better than what Wall St. is anticipating. Given the past reliability of this indicator, he may be right.  If true, this would be good news for the market.  Flash GDP numbers are released at 8:30 AM on Friday.

Contact Tom McCellan at the following https://www.mcoscillator.com/index.php?/help/contact/ and his website is located at http://www.mcoscillator.com/

Here is an important note about that small 3 step down that took place on Tuesday. The following scenario must be setup up as stated below.

  • The market has undergone a correction and a “possible” bottom of significance has been made.  On Monday the market stopped short of making a new low below April 10th.  This was a significant event.
  • This bottom is followed by a nice rally, not a rocket but a decent rally
  • The rally is followed by a correction that has a slow 3 step decline, which only corrects no more than 50% of the prior rally.  Normally this 3 step decline is well formed.
  • Upon completion of the 3rd step down, buy for a short term rally that “may” turn into a significant rally.

In the past, I have seen this small, well formed 3 step correction of the initial rally (step 1 up) turn into the “last chance” to get on board before blast-off.  Blast off hasn’t been the case in this rally.

I bought on Tuesday at the conclusion of the 3 step decline (see chart below) but unfortunately I didn’t publish this fact.  Because of my longer term viewpoint I thought it likely that the rally would flame-out.  But it hasn’t done so and presently it is knocking on the door of the April 17th high.

04-25-12 SPX 1 MINUTE BARS

The following chart has been relabeled with what I believe to be the correct wave count.  On the April 2nd peak I believed that we had ended the rally that began in November 2011.  I now believe as the rally continues that the November rally is still intact.



I had stated previously that history was repeating.  The first chart is April 2012 and the second chart is the month of April 2011.  I’m wondering if we are going to repeat the rally of late April 2011.  In 2011, the rally stopped on May 1st.

05-01-12 SPX 60 MINUTES – updated 4/23/12

05-01-11 SPX 60 MINUTES – updated 4/23/12

How does a bottom at this point work in relation to the present Hurst cycle outlook?  The Hurst chart below shows several smaller cycles bottoming around mid-April and a larger one bottoming in late May.  If we had a significant rally take place now, the cycle bottoming in late May would be adjusted to bottom in mid-April.  That is an easy adjustment to see in the Hurst cycle outlook because of the “The Principle of Synchronicity” (Waves in price movement are phased so as to cause simultaneous troughs wherever possible).

04-21-12 HURST CYCLES – 2009 to Apr 2014


The following is a quote from Jeff Monday column.  It looks like good advice to me.

“In my own experience the largest profits we have ever taken have come from stocks purchased while they were making a new high in a market which was also momentarily expecting the top. As I have already pointed out the absolute price of a stock is unimportant. It is the direction of the price movement that counts. It is always probable, but never certain, that the direction of the price movement will continue. Soon after it reverses is time enough to sell. You should sell when you wish you had sold sooner, never when you think the top has arrived. That way you will never get the very best price—by hindsight your individual transactions will never look daring. But some of your profits will be large; and your losses should be quite small. That is all that is necessary for a satisfactory, enriching investment performance.

Stock Profits Without Forecasting – by Edgar S. Genstein”

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3 Comments on “04/25/12 – Rally – How Big Will It Be ??? © ™”

  1. focus12345 Says:

    Fair enough.


  2. Bob Says:


    Posting my trades on the blog could be confusing because I make multiple trades using Walter Bressert’s “Money Management” system of trading (see the GLOSSARY). In the Bressert method, there are 4 trades involved in a transaction, one initial opening trade and 3 closing trades. Because of the multiple trades involved in one of my trading signals, it would be confusing to list all that I do. Also I would undoubtedly give the wrong impression on how one should trade and what I’m actually doing.

    I am a firm believer in the quip, “THERE ARE RICH TRADERS AND OLD TRADERS, BUT THERE ARE NO RICH, OLD TRADERS.”. I have a lifetime of trading and I know that this quote is true. If followed faithfully, Walter Bressert’s money management has the methodology to force one to trade long term and that’s a good feature.

    It takes a long time to write my blog because the blog is my thinking place. The blog is where I try to convince myself about a belief that I harbor and it crystallizes and clarifies my thinking. Clarity of thought is something we all need in the stock market in order to avoid emotional decisions.

    Because of my failure to alert all to what was happening beginning on Monday, I think I should post frequent short messages that tell what’s on my mind at the moment. This “could” be confusing because a LOT crosses my mind. We’ll have to wait and see how that works out.



  3. focus12345 Says:

    Thanks Bob your calls have been good . Is it possible to post when- ever you make a trade?



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