"Zooming in to get a better look, that is a very clear set of waves, but is it 1-2-3 or a-b-c? I'll tell you this: if this thing goes above $26.50 then I going to become very, very worried about my short term shorting calls for the DJIA and S+P."
Well it actually went up to $26.90 on Thursday before pulling back a tiny bit. As promised this did cause concern and so I did a good number of models on a good number of DJIA stocks and they all looked like they peaked. So I zoomed in even closer on GE and I think I have a new count that accounts not only for the large horizontal triangle but also for the run into Thursday's close.
The new count not only perfectly counts that horizontal triangle as wave 4 of 1 down, it also accounts for that wild volatility on 6-30 (typical a-b transition). Finally the gap that showed itself is actually a good thing as it suggests that it was 3 of 5. That means one more small wave up is expected and that would take us back up to the level of the real prior 4th which was the tip of that horizontal triangle. It would also kiss that resistance line from below. Finally, it would be right at the 61.8 fib. That confluence of resistance would have needed the power of a 3rd of 3rd to break back up through IMO. So an AM pop and then an afternoon drop would be the perfect way to enter wave 3 down for GE.
Time will tell but at least I have a credible explanation for that triangle which has been bugging me.
No comments:
Post a Comment
Hi and welcome to my blog. Comments have been enabled for anyone with a google account.