Having said that, in EW analysis recent past correctness doesn't guarantee anything but it does increase the odds of being correct in the near term. At the end of the day it is always about odds and never about certainties which is why all bottoming or topping calls on this blog always have the intrinsic caveat of USE STOPS because the model might become invalidated. Model invalidation is not failure. The only failure is watching a model invalidate and then failing to act. That is not something I can control in my readers. Failure to let one's thinking side override one's emotional side is a personal issue.
So, here is my view of the likely way JNUG plays out next week. Simply worded, 3 waves down have transpired from blue b/red e. The current model requires 5.
- Green 3 is shorter than green 2 per the red vertical measurement stick and thus wave 5 must be shorter than green 3 (i.e. reverse upward before ~$34) else the model is busted. Please don't go away thinking that this must happen; "else the model is busted" is always a possibility.
- A move back above the blue horizontal without one more wave down also busts this model.
- In the diagram below, orange 3, 4, and 5 are stretched out to bottom some time before noon but if this gaps down Monday AM then it will likely be trying to put in a unicorn tail type finish. So the 4th wave might be a very fast bounce after the gap followed by one fast and final plunge to something just above $34 before reversing upward. You have to be ready right at the start of the trading day if you want to be there with your Gatling gun all set up on the tripod as the herd dashes into your sights. In the case of a unicorn tail finish, the optimal slaughter will occur in a very short time window.
- The blue model would just be a HT 4th wasting time but the end result would be the same in terms of bottoming price.
- If you catch the bottom on this, set stops just below the red vertical that marks the limit of wave 5. If this is exceeded to the downside, all bets are off and Avis final lower low in M+M could be unfolding. Don't sit there and take it...
No comments:
Post a Comment