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Jean,
I have a few questions since I do not understand/use Gann, Fibo, Elliott
Wave: I have rearranged some of the statements and interspersed my
questions, and used the more commonly found indicators to highlight my
logic.
My net takeout from your analysis is that it is impressive in its details
and effort but it looks to me like the numbers are made to fit the desired
conclusion, and not the other way around.
> I have come to the conclusion that a stock market crash this
> year (l999) is inevitable. Now, let us go back in l929
In 1929 the real crash started when the 200 day moving average was broken
and failed a retest (see gif). We have no such setup now. To get such a
setup we would first need to fall to 9091 (increasing @ about 15 points a
day).
9100 itself is the bottom of the handle formed before the Dow broke out on
the present rally, as well as the lower end of the trading range it
established during the shakeout of the weak longs subsequent to the advance
from Sep 1 / Oct 8 double bottom.
July 20 1998 - Dec 14, 1998 cup and handle formation, and/or the inverted
head and shoulders pattern that formed which led to the current rally
projects the rally to continue to 2x times the peak-trough distance from the
9350 neckline - 7350 bottom to approx 13,500.
While the journey to 13.5k may not be linear, why would the bull case be
considered over that would lead to such a crash as you analyze?
Why won't 9100 hold as a support level?
This decline to 9100 itself would be significant in percentage terms to
start with - even if it came about, and price would still be within "bull
market" tolerance of the 200 dma.
> October 1929 = High or end of previous major 5 waves up = Dow touches 382
> points or Fibonnacci .382
>
> Then,
>
> CRASH - Wave 1 = Within 2 months from the high (382), the Dow touches 200
> for a total move down of 182 points.
The actual closing number is 198.7 on 11/13/29. How does this change your
calculations?
Is the distance in terms of time from the 9/3/29 closing high to the
11/13/29 closing low any factorial of a Fibo/Gann number?
> CRASH - Wave 2 = Within the following 6 months, the market recovered to
290
> or 90 points gain. Here, notice that half of the retracement is made back
> up from the original 182 points down(wave 1).
294.1 was reached on 4/17/30. This is 95.4 points retraced, and the
retracement failed at the 200 dma as shown. Since we are talking numbers
here, 95.4 is greater than 50%. In low base numbers, such variances mean
significant percentages, esp for exact science like Gann or Fibo.
> CRASH - Wave 3 = Finally in June 1932 (after 34 months from the high), the
> market touches the 43 points level and establish the end of the major bear
> market.
>
> NOTE: For any wave to be confirmed as fitting the picture, the market will
> usually and normally retrace half of the last move either up or down from
> the previous major low or high which it actually did in Crash - Wave 2.
>
> NOW, ON THE WAY UP...
>
> WAVE 1 = 1972 (last quarter) D.J. hits 1051
What happens to the period from June 1932 to 1972? No waves? Or was this one
big wave?
How come
- 8/16/37 to 3/27/38 does not qualify, when the Dow lost 46.6% of its
value? - or
- 5/9/40 to 6/10/40 is not considered, when the Dow lost 25% of its value in
that period - or
- 6/13/49 to 9/13/51 when the Dow gained 70.3% in a virtually jagged
straight line?
and so on. I do not understand why selective years "fit" your choice of wave
structure or Fibo series when the history book is full of moves of equal or
greater magnitude, esp when capital employed into the market as a %age of
GDP is factored into the equation.
> In this case, the total move down is 1130 points or half retracement from
> 1974 low or 577 to high of 2746.
What about the MANY periods from 1974 to 1987 when half the move to that
period's high was taken out? Why does that NOT qualify as a wave you
measure?
> WAVE 5 = WHEN DOW JONES HITS 11550 TO 11600 POINTS. END OF MAJOR BULL
> MARKET, PERIOD.
Why? What if we reach 12000? Is the goal reached?
When 11550-600 is reached and we fall to (say) 10,000 - is the bear market
over?
> We achieve our goal by using Fibonnacci numbers as follows:
>
> Wave 1 or l972 = Fibonnacci number 3 times 339
Why not 5 times or 8 times? They too are Fibo numbers.
>which is the total down move
> of the last crash (1929) totals up to 1017 plus 43 (crash low) equals 1060
> and the actual high in 1972 was 1051.
So WHAT? Since when did we start rewarding ourselves based on how many
POINTS we reached on the DOW? Isn't 1060 points on a base of 43 different
from 1060 points on a base of 1017?
> Wave 3 or 1987 = Fibonnacci number 8 times 339 equals 2712 plus 43 (crash
> low)
Why not the 1949 low? Why not the 1937 low? Why the 1929 low?
>equals 2745 and the actual high in 1987 was 2746.
Because it "fits" your numbers?
> Also note: W.D. Gann Square rule is now in full strength 34 times 340
> (square root of 34) = 11560. Note that the number 339 was rounded up to
> 340.
> When that number is hit, the 3 waves down will be in an effective mode. We
> are to expect then that THE MARKET WILL DROP FROM 5500 to 6000 POINTS
> within the following 2 months (half of retracement of full move from 43 to
> 11569) which will signal the very next GREAT GREAT DEPRESSION and a
> rendez-vous with destiny and Y2K...
Oh please.
Haven't you stated as such before on afund.com, some 5000 points ago?
> There are many more technical analyses that add up to similar results
which
> also reveal the exact same story. At this point, this present exercise
> seemed to me more realistic for an immediate comprehension of the matter.
Such as what? Momentum? Nope. Breadth? Nope. Volatility? Nada. New High/New
Low? Nope. Bradley? Nope - that peaked on Apr 9. Please clarify, in less
complicated/convoluted math, why any of your (round numbered) analysis holds
water.
>
> Ex: Twice 34 (Fibo) years from l932 to 2000
What about twice 5 or twice 55 years, both Fibo numbers?
> 13 (Fibo) years from l974 leads us to l987 (Note: a cycle bottom to
> top or top to
>
bottom
> usually repeats twice only
> when
> properly measured.
> 13 (Fibo) years from 1987 leads us to 2000...
Q: Why 13 years from 1987 -
A. Because it fits the conclusion you are looking for. Why not 5 years or 8
years?
In your first statement you say we have a crash in 1999. Now you say we have
a crash in 2000. Like, 365 days = Fibo number?
Just because PRICE is here does not mean TIME is here, or vice versa. Isn't
that taught in Technical Analysis 302?
> I sincerely hope that this will help,
It does, if only to clarify one fact: If you are shorting this market, I am
on the other side of your trade.
Sincerely,
Gitanshu
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