The model since then has validated that ADI is in a massive bear market. We have a crystal clear 5 waves down into the $50 range and then a 3 wave retracement to about the level of the prior 4th. Following C of 2, the lower support rail broke down with a gap. Within weeks this will likely be in freefall, and I'll place the odds of that in the 85-90% range. If this moves back up above the 38.2 then I will immediately back off and consider other short term potential counts but keep in mind that a rally from here, should it occur, could just be a gap fill to $57.90 prior to the beginning of some real free fall on this one.
If this model is correct then we are now in the very early stages of a 3rd wave down whose target price is $40, all of which I model as happening before year's end.
Now then, why should you listen to me? After all, I am just some guy on the web. I don't work for any brokerage house and I have never appeared on CNBC. Heck, I'm probably just full of "bullshit" according to some of my long time friends.
Of course they must be forgiven for their herding blindness because in fact, nobody is calling for this kind of selling on ADI, not even close. Below is the list of professional analyst 12 month price targets for ADI. That's 27 professional, day in day out financial guys with an average target of $67.56 and the lowest estimate of all of them is $53. That makes my $40 call "way out there" by any measure. I must be a complete fool to predict this when so many paid analysts disagree with me.
I do love the ballsy tests of the Elliott wave principal, don't I? I'm going to try to pick up a few contracts of the March 2016 $40 puts hopefully in the .75-.80 range.
Time will tell but I like my 85-90% odds and I won't have to wait very long to know if my model is wrong.
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