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Realtraders,
Now that I have covered "where we've been", that was real hard! : >) I
would like to pontificate on where we may be heading. Since the assumption is
that Wave 3:3:C/3 is complete then I'll attempt to use Elliott wave analysis
as a leading indicator of potential Wave 4:3:C/3 targets.
What do we know about Wave 4's:
1) I start with the assumption that the Wave 4 correction will be a minimum
of a simple ABC 3-wave pattern where the Wave C exceeds the Wave A extreme.
Wave 4's are known to be irregular, especially if Wave 2 is a simple ABC
correction, but for now I'll stick with the simple ABC until there are clues
otherwise.
2) Wave 4's should not close into Wave 1's territory. This is one of the
three basic Elliott Wave tenants If it does then it's more then likely that
my counts are wrong.
3) Wave 4's should not last longer in time then a 100% time retracement of
Waves 1-3. This is the maximum time target. If a corrective swing lasts
longer in time then the entire impulsive move to date (Waves 1-3) it is in a
time overbalance. The time overbalance would more then likely mean that the
current move is a new trend in the opposite direction.
Wave 4 Price Projections:
38.2%, 50% or 61.8% retracement of Wave 3
23.6%, 38.2%, 50% or 61.8% retracement of Waves 1-3
61.8%, 100%, 161.8% or 261.8 Alternate Price projection of Wave 2
Maximum Price retracement is the extreme low of Wave 1
Wave 4 Time projections:
38.2%, 50%, 61.8%, 100% or 161.8% Alternate Time Projection of Wave 3
38.2%, 50%, 61.8% or 100% Alternate time Projection of Waves 1-3
Greater then 100% of Wave 2 (4's are normally longer in time then 2's)
Once the move is underway and Waves A:4 & B:4 are completed you can hone in
on Wave C/4's end using the minor A:4 & B:4 waves for tighter projections.
Attached is the current NASDAQ chart with price & time projections. We are
now approaching the first price cluster on the chart between 3383-3398. Since
the first time cluster is between 10/27-10/30 any pullback off of this
3383-3398 area next week would confirm to me that just wave A:4 is completed.
What would negate this analysis? A close below the current low of 3054.55.
Lenny
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