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Extracts Mentorspeak "
Our analysis is now based on the presumption that we are in the
extended 5th wave of a 5-wave sequence which began at 7467. The
extended 5th wave began at 8328. If we analyse the movement from
8328 upwards, there are 3 possibilities. Before proceeding further,
keep the trendline drawn through 7878 and 8328 firmly fixed on the
chart. This trendline MUST NOT BE BROKEN. If it breaks, we will
have to look at several other possibilities.
We are now analysing the 5th wave which began at 8328. As you can
see, the wave is sub-dividing and if our analysis is correct, then
the extended 5th wave will sub-divide into 5 samller waves. We will
use the trendline touch points to arrive at the completion of the
smaller corrective waves. The symbols (i), (ii), (iii), (iv) and (v)
will denote the 5 smaller sub-waves of the extended 5th wave.
Wave (i) is from 8328 to 8990 = 662 points
Wave (ii) is from 8990 to 8829 = 161 points [24% of wave (i)]
As advised in an earlier report, we had come to the conclusion that
wave (i) CANNOT BE THE EXTENDED WAVE because that will terminate the
5th wave at around 9400 whereas the minimum target for the 5th wave
extension (taking the larger picture) is 9514. If wave (i) is not
the extended wave then wave (iii) or wave (v) MUST EXTEND. Also,
since wave (iii) CAN NEVER BE THE SHORTEST OF THE 3 IMPULSE SEGMENTS
IN A 5-WAVE SEQUENCE, wave (iii) cannot be less than 662 points,
thereby giving a minimum target for wave (iii) as 8829 + 662 = 9491.
FIRST POSSIBILITY
-----------------
Wave (iii) is sub-dividing and we will denote these smaller
sub-divisions by the symbols :1:, :2:, :3:, :4: and :5:
Wave :1: is from 8829 to 9103 = 274
Wave :2: is from 9103 to 8957 = 46 [ 17% of wave :1:]
Wave :3: is from 8957 to 9380 = 423 [154% of wave :1:]
Wave :4: is in progress and this wave MUST NOT BREAK THE TRENDLINE.
So we have a target of approx 9200 for wave :4: to terminate.
Wave :5: MUST NECESSARILY EXTEND and will have a minimum length of
551 points (9380 less 8829)
SECOND POSSIBILITY
------------------
Wave (ii) is not yet complete and is turning out to be a running
correction. This running correction is an a-b-c pattern wherein
wave a is from 8990 to 8829 = 161
wave b is from 8829 to 9380 = 551 [342% of wave a]
wave c is in progress and this wave c cannot break the trendline. If
the wave (ii) is not complete and is forming a running correction,
then wave (iii) MUST NECESSARILY be the extended wave and should have a
minimum length of 161.8% of wave (i), i.e. 662 X 1.618 = 1071 points.
If wave (ii) terminates at approximately 9200, we are then
looking at a minimum target in the 10300 range.
THIRD POSSIBILITY
-----------------
Wave (iii) is in progress and we re-read the sub-divisions as under:
Wave :1: is from 8829 to 9103 = 274 points
Wave :2: is in progress and is turning out into a running correction.
Again, the trendline must not be broken in which case wave :2: will
terminate around the 9200 level. This will give rise to an extended
wave :3: whose minimum length would be 161.8% of wave :1:, i.e. 274 X
1.618 = 443 points thereby giving a target of approximately 9650.
Keep all the possibilities in mind. The most important factor is that
the trendline MUST NOT BREAK. If the trendline holds - the direction of
the market is only upwards and as the market unfolds, we will get many
more clues as to which count is correct.
"
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