Friday, April 15, 2016

[CMG] update

Everyone once in awhile I'll throw a teaser chart on the unpaid blog to continue to show folks the power of Elliott waves.  Today's subject will be CMG since I have covered it extensively in the past on the free blog.

To recap history, my model did warn people about the coming peak in this post.  The model from it is reproduced below.

The small chart above right put a likely topping circle up to $720.  Actual top was a few percent higher at $760.  But then it called for a massive plunge and that is just what we have seen.

I later confirmed the breakdown in this post.  Keep in mind that I am not a food industry analyst.  None of the specifics matter.  I can do this with any chart, any industry because all of them have one thing in common: human herding.  The only tool that measures the ebb and floe of this is Elliott Waves.

Fast forwarding to today...

In the backlink I had flipped neutral to bullish on CMG telling shorts that if recent resistance at the 38.2 fib shown in the model back then could not hold then it would be bullish.

The 38.2 fib of the entire movement into the peak did not hold and the shares subsequently formed a rising wedge up to the 38.2 fib of the pullback since July 2015. 

However, the shape of the selling since then leaves several potential interpretations, all of about equal odds at present but which will resolve themselves into a high odds direction in the next few trading days.  One possibility right now is the red path shown below.  It is not yet confirmed but soon might be.  That gap is not to be ignored by shorts or longs.

A move below the recent low marked by the blue horizontal would tell me that red B was in fact likely W3 of the next wave down.  In that case, red A would really be blue 2.

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