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In a message dated 4/22/2001 9:05:45 AM Eastern Daylight Time,
dbewers@xxxxxxxxxxxxx writes:
Lenny,
I was looking at the weekly bond chart which is currently showing it in a
wave 4. As you know the decline off the top has been sharp and very short
time-wise which brings me to these questions. You have mentioned:
"As I have said in the past, Wave 4's should last at least as long as 38.2%
in time of Wave 3. So the low on 04/04 should hold for at least (2) months.
"
I have included it on the chart starting from the start of wave 2 (is that
correct?).
LR - Yes, that is correct.
If so it would indicate a low in bonds (even if they ABC from
here since they have stopped right at a 50% retracement so far) is not due
until at least the week of 7-13-01?
LR - If this is a Wave 4 not a 4:3 then that would be my initial premise.
Notice how the Short Term Ellipse is just about to catch price? I've seen
this exact thing happen over & over again right around a fib # such as 38.2%
or 50%. The market turns back up and everyone thinks Wave 4 is finished but
in reality many times it's just A:4. The good news is that B:4's usually
retrace at least 50% of A:4's so you can still play the move with tight stops
once it hits the 50% retrace area.
I have not used this time analysis in the past and the last time
it was discussed as I recall it was on a weekly Cocoa chart (on the AGET
board) and it was dead on in predicting an ABC pattern there since not
enough time had evolved in the wave 4 (not even close like this).
LR - I don't recall the Cocoa discussion but here's a similar link to a
February hogs discussion:
http://groups.yahoo.com/group/get_traders/message/1358
I forget, does this come from Miner and are there any %'s that can be
attached to it, ala happens 70% of the time etc.?
LR - Yes, this does come from Miner/Steve Griffiths. They give no %'s to
validate this theory.
If this bond chart is correct time-wise, it is "somewhat" in agreement with
your statement that the market rally has "at least 2 months to go" and it
has the similar "7-13-01 date" you mention. It can't be that easy can it
(bonds generally fall, after a wave 4 "B" leg rally as the stock market
rises into 7-13-01) then . . . .?
LR - Now Don, that would be predicting the future : >)
Let me know on the %'s if any are available and the source.
Good luck and good trading.
don ewers
Don - A few scenarios on the Weekly Bonds for you to look at:
1) Since I like Wave 3's to be around the 161.8% extension of Wave 1 and the
Weekly Bonds so far have fallen well short of that mark (110-14) you could
make the case, albeit not a great one due to the Elliott Oscillator, that the
Bonds are currently in a Wave 4:3. Not likely but confirmation of this would
be the most recent high being taken out before the July time frame.
2) Go with GET's count of a current Wave 4. Besides the time issue that has
been discussed, there is a issue regarding Wave 4 overlapping into Wave 1.
GET allows on futures charts a 17% overlap. I'm usually pretty rigid on the
rule and simply don't like to see a close into Wave 1's territory. If you run
a "whatif" bar below the Wave 1 high of 99-28 and change the 17% overlap back
to 0% overlap then GET's count will change to a completed ABC. If 99-28 holds
and we have a B:4 move back up then I would look towards a 50%-61.8%
retracement before the C:4 move back down. The biggest clue for this scenario
is for 99-28 to hold.
3) This is the one I may hold my hat on right now especially if there is a
breakdown below 99-28. The 10/09/98 - 01/21/00 move has just been retraced by
exactly 78.6% to 107-08. This is very common for Wave 2's and also Wave B's.
Either way the possibility of this current move down being the start of a 3
or C is very real. My confirmation here would be to first watch the
inevitable retracement back up towards 107-08 and see if it holds. The next
move down would need to:
A) break below 1:3 or A:4
B) break below the Minor 1 or A high
Well, I think I have all the bases covered! (ggg) As usual, the moves of the
market will start throwing out each scenario 1 x 1.
Lenny
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