For those not familiar with Elliott Wave theory, the simple explanation will be that the Elliott Wave has 5 waves pattern. As you can see in the weekly Dow Jones chart below, I tried, to the best of my understanding, identify the 5 waves pattern in the trend. Also, you can see the A-B-C wave patterns right after the 5 waves patterns; these A-B-C wave patterns are the corrective patterns.
Now, as of today, my weekly chart shows that the price-action is finding support from the Feb 2011 high. This support can be significant because it can be used as an “excuse” to spring board the start of wave #5 which can end up where I put the double ?? (my extrapolation only, of course).
Now, if you don’t agree with me; that is your right. If you want to believe that the market will fall off the cliff, that is certainly your freedom to do so. Meanwhile, I’m going to see if my thesis will prove to be correct by watching if the weekly bar continues to make new higher high and higher low from here.
Regardless, I will see you at the top of wave #5. Ice cream will be on me when you get there. 🙂
Again, the above is my opinion only. Just so you know, I don’t have any “emotional” attachment to my opinion. Meaning that if the market takes a dump tomorrow; I may as well come back with another chart showing why the Dow Jones will be heading down the cliff very soon. I just need to find another “theory” out there that will support my thesis. You see, opinion is like a pin holding the onion; the darn opinion (oop! I mean onion) is just too heavy for the little pin to hold it in place!
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I like this chart and your explanation, but the problem is all in the timing and duration of the correction–I’d be surprised if we didn’t at least test the 200 day at some point during trading today, especially in light of more bad news.
“the problem is all in the timing and duration of the correction”
Us, mortal human, can only ‘guess” the timing and hope we nail it; if not, risk management will be our saving grace.
Thanks for the input.