For Erik
For Erik
UPDATE 12:41pm EST: I promised Erik to put up a chart about the 650 level I mentioned in one of my comments. This one is for you buddy:
I never cease to marvel at how Fibonacci levels are key to projecting possible targets in the wave count. Here’s what I uncovered yesterday afternoon during my weekend charting session: As you can see the Friday close brought 3 of (5) to the length of 1 of (5). My reasoning was that we would either bounce here and see a truncation or continue down and meet at least the 702-704 level.
Why 702 – 704?
Because it happens to represent a 123.6% multiple of 1 of (5). The next fib is 680 and the one after than is 650. What is interesting about that is that this is Erik’s range and at this stage I see two possibilities:
- We bounce right here and touch 760 – 770 and then descend into 650.
- We continue down and that of course would also either mean two things:
- We are completing 3 of (5) at either 680 or 650ish. Then we rally and we’ll see a bottom of (5) around the 600 area. Unless of course this move was too rapid and 5 of (5) will be a truncation.
- We are actually already in 5 of (5) and this is the end of Primary wave {1} of Cycle wave c. Meaning we rally hard and that soon.
This is why I’m a bit cautious and took profits earlier this morning. But if you’re aggressive and are only exposed with play money there is a possibility for further downside.
UPDATE 1:05pm EST: BTW, this happens to be my 400th post! Due to the ongoing recession I can only afford one single confetti and a digital audio recording of a cork popping out of a bottle of Cristal.
Paxoramus asked what I think about the ISEE readings right now. Well, they are very bearish on the Indices & EFT column, indicating that we’ll either get a complete capitulation here or that a temporary low is in. I am still trying to make sense out of the bullish readings in equities. Perhaps that also confirms the current Zero reading.