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Lenny, when I read this, I read the missing piece to the puzzle I've been
looking at on my weekly chart. Somewhere after the 62% retracement was taken
out, I fell into the assumption that the w.3 or w.5 would take out the 98
high and removed the 78% retracement. So what do I see that supports the
conclusion that the rally from the 99 low is corrective? Aside from the EW
work, I do a lot of work with regression channels, trendlines, and symmetry
in my trading. (Chart is unadjusted continuous all sessions.)
a) The w.3 rally failed right at the middle of the regression channel from
84 rather than at/above the top of the channel where w.3's generally
terminate. This is bearish and means that the bottom of the regression
channel at 95+- is likely to be tested.
b) Generally, when a pivot high to the left of the extreme low is broken, I
expect the pivot low to the immediate left of the pivot high to hold - this
symmetry is frequently maintained for long periods of time in both major
rallies and declines (a variation of cup and handle work). In this case the
left pivot high at 106-10 was taken out (highest horizontal green line) so I
expected the pivot low at 102-29 (horizontal red line) to hold and in fact
the area held for a bit before cracking. The fact that it failed indicates
that symmetry is failing.
c)That heavy rising green 94-97 trendline has failed suggesting that price
could easily fall to the heavy red 84-94 trendline. The proximity of the
bottom of the channel and the heavy red trendline is probably not a
coincidence.
Of course, this whole scenario is not in the bag, but the implications are
either roaring economy or some nasty inflation.
Earl
----- Original Message -----
From: <rosow@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, April 22, 2001 11:05 AM
Subject: Re: [RT] NASDAQ Rhythm or Bond Rhythm?
> 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
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