In any case, I see FAZ trying to form a long term bottom right now. The chart below is a very good looking wave count which also shows that the 3rd of 5 was an ending diagonal. As mentioned many times in this blog, ending diagonals are usually 3rd waves these days. After 5 waves down like this the very least we should expect is an a-b-c to the prior 4th. From today's close of $20.90 that represents nearly a double. The old saying is that the banks will lead the way up and so I suspect that banks will also lead the markets down.
Zooming in, it look like wave 1 will be an expanding triangle. If this model plays out, think about the percentage moves we are talking about here in a 2-3 week time frame: they are on the order of 25%. Most people would be happy with that over 3 years much less 3 weeks... But if we get it as shown below (especially the throw over into red 5), bail out as soon as it falls back into the channel, let it plummet again as shown and then jump back in because the next wave will be a 3rd wave.
Again, this is just a model and one has to be wary that it, like any other model, could fail to pan out. That is just the nature of gambling. That's why they call it "gambling" instead of "winning". But that is not to be confused with this being a random guess (a difference which a surprisingly large number of otherwise smart people cannot discern). The model is based on the Elliott wave principle and the fact that the moves have all been 3 wave deals since the bottom. This is the herd milling about on the banks of the river wondering whether or not the crocs are lined up underneath the water waiting to nab them. But with 5 waves of pressure behind them the odds are very great that they will decide to take the chance.
A break below $20 negates this model.
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