Now if I wanted to know where 'the final bottom' was going to be, to play the next upside, first I might label all of the potential 'Start'-A-B-C patterns for calculations. See how this looks:
Now we pick up the dates and prices for these setups, remember we don't need the data for wave 'B' just 'Start', Wave 'A' and Wave 'C'.
Blue Labels:
Start : 04/02/07 13.70
Wave A : 07/23/07 23.12
Wave C : 10/23/07 24.85
Magenta Labels:
Start: 10/23/07 24.85
Wave A: 11/27/07 16.04
Wave C: 03/17/08 10.85
Red Labels:
Start: 03/17/08 10.85
Wave A: 04/02/08 14.88
Wave C: 06/05/08 17.47
Now we calculate the dates of the major nodes.(All 1.00 nodes, in this case)
Blue: 07/23/08, 11/18/08 , 09/03/09
Magenta: 08/25/08, 10/23/08, 02/27/09
Red: 09/12/08, 10/21/08, 01/16/09
Now we place them on a recent chart to see how they would have looked. Remember, we are looking ahead in time from when we would have done all of this, we wouldn't have known in advance about the rally from the lows...I'm just presenting to show how the nodes fit into the overall picture. Note that two nodes are almost on top of each other, at 10/21/08 and 10/23/08. That often happens at or near major turning points. This is what you look for.
Indicators, as always, are a help, and watching for a positive divergence helps show that the 11/18/08 date (blue vertical line) is preferred. The 10/21 and 10/23 cluster show no positive divergence on MACD, and you wouldn't want to enter a long position without that strong divergence.
The actual bottom was on 11/21/08, and the lowest price on that date was $6.02 a share.
4 comments:
Hi Mark, well everybody and there brother is waiting for the big primary wave c down to new lows and then you have bernake, geithner, obama, and some economics saying things are turning around. Well we know things are not turning around but people trade or invest what analnyst and the govt tells them whether it is true or not so In my opinion it is nothing more than a ponzi scheme and if you want to make any money in the markets you have to play there game. I have been taking small short positions on this move up and I have had my head handed to me believing the elliot wave theory because they change counts after the market makes it 's move. waldo.
And another thing they always say that the dollar moves inverse to the markets, well look at it today, dollar green and market green and with one of the lightest volume days of the year so someone is holding this market up and I assume it is the feds feeding goldman sacks and jp morgan chase more tax payer dollars to run the ponzi scheme. waldo.
Hi Waldo,
Elliot wave is at best an art, I know Prechter called for a top a few weeks ago. It's possible that 9/23/09 was the top, but tops are more of a process than an event, somewhat different than bottoms that can climax and turn in a short time range. I personally feel that stock options are very hard to use, you have to get the direction and the timing just right to profit from them. When I used to do that, I used to buy something like 3 months out to handle that, at some sacrifice of profit, so they wouldn't expire, but it was still tough to make money with them. Very difficult. Short ETF's have their problems too, they leak over time if the market stays in a narrow range. Then on top of that you have the Fed manipulating things...
It's rough out there...
I know where your coming from...
Regards,
Mark L.
"A little example..." - good piece of work. Ties things together - in that it gives direction on how to proceed evaluate a potential buy.
The choosing a stock that might be a potential candidate is another difficult process! No easy answers there!
Although, if one plans on buying an ETF that tracks an index, then you put the index through the "A little example" steps, to try and determine potential turn points for long or short buys.
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