[SDRL] update

In the backlink I presented a model which allowed for an upward reversal in the share price.  While that model went bust, I maintain that it shows the value proposition of the Elliott wave system.

But how can a blown "call" be thought of as any kind of positive??  This is what many who think they know anything about playing the stock market cannot get past.  If you are in that mindset camp, please pay attention.

First, go back and read the post carefully.  I did not model a potential reversal based on arbitrary gut feeling.  It was all chart based and that means I have no emotional attachment to it and, more importantly, that I try to only buy when being wrong would come with a very near stop loss trigger.  In other words, it either behaves like the model demands or you sell.  Period. No making excuses, etc. because there is no face to save.  It's just an odds based model.  This is completely different than stock picking based on fundamentals, etc. which is the stock in trade (no pun intended) of charlatans and TV "personalities" like Cramer.  That is ALL faith based gambling; it is an idiot's errand.

In my previous SDRL post I provided the model below with the commentary, "Folks, I might turn out to be wrong on this call.  After all, EW is about odds and not certainties.  But if my model is wrong then I will know nearly from Tuesday's open.  That doesn't mean it will be far wrong but in the event that it is wrong by 1 penny it will be on me to show a new valid model that indicates bullishness is warranted.  There is no emotion here.  There is only a model and it will be right or it will be wrong.  No excuses, no shades of grey.  Cut and dried."



As the mind of the herd would have it, that support broke down (very quickly I might add) and the model became a bust.  So what was the next step?  Stay the Hell out until I can show a model that indicates bullishness is warranted.  Since no new model has been been presented since then you can assume I found no EW evidence for bullishness.

The reason I'm posting about these shares again is that we likely are at or very nearly at a major bottom in the wave count.  $2.00 is often a psych support level but it seems one tiny wave shy of the final bottom.  But at these price levels, a "tiny" wave can still be 50%.  So it is time to start treating SDRL as a non-expiring call on the ocean drilling industry.  No crash ever lasted forever, and no oil is not going worthless like so many idiots believe is possible.   This is all about volatility in the pump and dump money supply, not real economics. 



Zooming in to just view the wave down that began in Oct, the primary (red) model says we should look for one more lower low as shown, that it should begin to play out early next week, that since wave red red 1 and red 2 are already in place that we still need red 3,4, and 5 before we bottom in green 5 and blue 5. 

Alternatively, the climb to red 2 could be counted as a "5".  In that case waves 1 and 2 of  of green 4' are already in place as of last Friday and early next week we could see a gap up as shown to a higher high than green 4.  I would buy the first small 3 wave dip after than and then just set stops below where I bought.  Then we sit and wait to see if we just get a peak into green 4' which then becomes a sell with the ideal of buying back in quickly if we get a higher high.  In other words, the bottom could already be in and we could be working on wave 1 up of the big vee rebound that I expect to see in 2016.

So now we have a clear and concise trading plan.  I don't know that this model will play out to either red or blue paths but I think odds are high that it will be one of them, or something very similar.  If you are looking for guarantees you should not be gambling in the stock market.  You should be buying gold and silver coins which you store yourself in your own little hidden vault(s).  That is as sure a thing as ever you will get.  That is not gambling, it is saving and I absolutely do this exact thing myself and recommend it to all my friends, family and readers.  Cost average into physical metals as the core of your retirement savings and you will certainly have something when you retire.  Additionally, there will be no enforceable taxation on any inflation gains that will certainly have taken place 10-20 years from now.