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Friday, May 1, 2009

What would a P2 50% correction look like?


I started with 2 very sound Elliott Wave premises in making this chart: 1) A 50% correction for a wave 2 - which is normal 2) A Fibonnaci time relationship between decline (.618 ratio for Primary 1 - 17 months) and corrective (.382 ratio for Primary 2 - about 10 months)

I assume it will take a max number of correctives to get there: A triple zig zag at intermediate wave level.

But mostly I made this chart to jinx myself because I am holding a doubled down load of QID today and I pretty much committed to a nice pullback this first week of May. I figure if the market keeps heading up to 950 instead and its 200DMA prior to a 38% corrective move, I figure I'll look brilliant at least even if my daytrading account takes a stop loss on QID.
So there ya have it. This chart is a most presumptuous hedge against my load of QID. hehe. If it pans out -at least I'm a broke genius.

(Disclosure - I do hold mostly indexed long funds in my 401K - I ain't selling til certain levels get hit - 200DMA for starters)

Regardless it was fun to make and I'm off work today and beats cleaning the house.

7 comments:

  1. you are working hard this morning...... very nice......

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  2. That's good stuff right there!

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  3. Hi Daneric,

    Thanks for this "speculation" chart. It's useful to visualize a possible path for P2.

    If P2 does top around 1100, where do you think P3 will bottom? And how many months do you think P3 will take to bottom? (Just as a "speculation".)

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  4. 666 888 777 1111 444

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  5. 50% would look green to me. :)

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  6. If you lower you (w) c target to what I think will be more like 920ish, it shortens and lowers the P2 wave to more like 1050 and Oct.-Dec. or so. This seems more likely to me. Also, could the timing of the bottom channel test be a little sooner? Maybe. It doesn't feel right that we bolt up to low to mid 900s in the next week or two. I'm thinking low to mid 800s, then 920.

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  7. Fine work Dan, good to see some weekend chart tweakers like myself 'round hyea..
    I'm going with the more bullish case after closer
    scrutiny. Enjoy your weekend.

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