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Extracts mentorspeak "
Oct 9, 1998,
To refresh your memory, we are in the 2nd wave of the Vth wave. In
all probability, the 2nd wave is heading to form an A-B-C irregular
flat. The A-wave was an a-b-c flat from 7530 to 7880. The B-wave
appears to have terminated yesterday at 7467, in which case we are
in the C-wave. Let us now analyse the entire Vth wave.
The 1st of the Vth is from 8160 to 7530 = 630 points. For our
entire analysis to be correct, this 1st wave MUST BE THE EXTENDED
WAVE OF THE 1-2-3-4-5 Vth wave. This extended impulse wave MUST
NEVER BE RETRACED BY MORE THAN 61.8%. That gives us a target of
(630 X 0.618) + 7530 = 7919 points.
The A-wave of the 2nd wave is from 7530 to 7880 = 350 points
The B-wave (if it is complete) is from 7880 to 7467 = 413 points, i.e
1.18 times the A-wave. This is less than 1.382 times which would
then have made it mandatory for the C-wave to fail, i.e. not go
above 7880. That will completely spoil our analysis because the 2nd
wave would then turn out to be an irregular failure which implies
that the 3rd wave MUST BE AT LEAST 1.618 TIMES THE 1st WAVE.
If our analysis is correct, the A-wave MUST BE FULLY RETRACED thereby
making the completed 2nd wave an irregular flat (not an irregular
failure).
Therefore, the market MUST GO above 7880. At the same time it must
not go above 7919 which is the 61.8% retracement level of the 1st
wave. HENCE, THE MARKET MUST COMPLETE THE 2nd WAVE AT A POINT WHICH
FALLS BETWEEN 7880 AND 7919 OTHERWISE WE WILL HAVE TO DISCARD OUR
COUNT.
However, there is a possibility that the B-wave is still not over.
On the minor count chart, the B-wave appears to be a combination
wave (minor count charts are not very reliable for Wave Analysis)
and combination waves often have the tendency to end in a triangle,
e.g. a-b-c-x-a-b-c-x-a-b-c-d-e (flat + flat + triangle). In that
case, the termination point of the B-wave will be the end of wave-e
of the triangle. This point could fall above the 7530 point thereby
negating the B-wave from being irregular.
Let us observe the market today, keeping all these in mind.""
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