Elliotscope : Update

[Rajesh <demon@xxxxxxxxxxxxxxxx>]

Long BEFORE the Bell,

Dear Victor

In a Bull market no one is desperate for some indicator as to where the
market is headed since even cats and dogs run up. But just guessing is a
dangerous game. EW is a science in itself.If you remember at 7400 we had
no other indicator that gave us any definite direction of the market.
(If you remember my own bias in favour of 6400 which my mentor threw out
as rubbish) Here is the latest from my mentor:

Extracts Mentorspeak "

Nov 17, 1998


The trendline drawn through 7878 and 8328 was not broken.  These are
the possibilities now.

1. If the above trendline breaks within the next few days, then the
   4th wave is still not complete.

2. If the trendline holds, then without doubt we are in the extended
   5th wave which started at 8328.  Here, there are 2 possibilities:
   (a) The (i)st wave of the 5th completed at 8990 points, i.e. the
       (i)st wave is 8990 - 8328 = 662 points.
       The (ii)nd wave of the 5th was 8990 - 8792 = 198 points,
       i.e. 30% of the (i)st wave.
       The (iii)rd wave of the 5th is in progress.
       Let us look at the larger picture.  In a 5th wave extension,
       the extended 5th wave must have a minimum length of the
       distance travelled from 0 to 3, i.e. from 7467 to 8652 = 1185.
       That gives a target of 8328 + 1185 = 9513
       Coming back to the present, if the (i)st wave of the 5th is
       the extended wave, then the entire (i)-(ii)-(iii)-(iv)-(v)
       of the 5th will terminate at approx 61.8% of wave (i) added
       to the top of wave (i), that gives a target of 662 X 0.618 =
       409 added to top of wave (i) 8990 = 9399.  This target falls
       short of the "larger picture" target of 9513.  HENCE WE
       CONCLUDE THAT THE (i)ST WAVE OF THE 5TH IS NOT THE EXTENDED
       WAVE.  In that case, either the (iii)rd wave or the (v)th
       wave of the 5th will extend.  Now, the (iii)rd wave can NEVER
       be the shortest of the 3 impulse segments of a 5-wave
       sequence.  Hence, the minimum target for the (iii)rd wave is
       8792 + 662 = 9454 taking into account that wave (iii) is at
       least equal to wave (i).
   (b) The (ii)nd wave of the 5th is still not complete and is in the
       process of making an irregular a-b-c.  If this is the case, the
       (ii)nd wave pattern MUST turn out to be an irregular failure
       since no part of the extended 5th wave can break the 2-4
       trendline.

All said and done, the idea is to remain firmly invested in the
market and if already in profit, you should be looking at adding on
to your positions at every fall.

Regards,