Fast forward to today and you might be thinking that this looks just like my model so we should expect one more wave to a higher high. But a 4th wave HT is not confirmed until it is confirmed and this one looks like it has busted. The reason is that E of 4 must be 3 waves and my best count here is that this wannabe E is 5 waves down. If I'm right about that, it blows the whole top level count.
Zooming in on just the supposed E wave (below), we can see a very clear 5 waves down have transpired. Also, this wannabe E has now fallen far more than expected for a normal E wave throw under. Because of that, I have to wonder if red D is really wave 2 down of a stealth bear market in CAT shares that actually began in 2011with 5 waves down into late 2011.
If that is the case then the recent wave down to today's level is likely only 1 of 3. That means that if we get the 3 wave move back up to $90, which is currently my top count, then that would be 2 of 3 and of course then the next wave down would be 3 of 3. In other words, the best time ever to buy 2017 puts if one were options oriented. Cat collapsed down to the 20s during the last bust into 2009 so I think this time the bottom could be lower than that.
If this moves into green 2 as shown then I will be posting further on what options I will be playing on this.
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