Heinz - trying to make some Elliot-sense of the Nets. I am looking at the CMGI chart, which closely resembles the dot.x. I see us near completion of a super-clean wave 3 down. Wave 1 was the first sharp crack down from the all time highs, wave two was the rapid correction, wave three has been a very clean 5-subwave move down, and it looks like we have reached our minimum targets for the 5th subwave. That doesn't rule out an extension, but I would start looking for some signs of short-term bottoming. Plus all of the margin liquidation talk from yesterday is somewhat bullish from a contrarian perspective.
If this wave count is correct, we would expect at least a 38.2% retracement of wave 3. This would take us (roughly) back to the 100 level, i.e. 25 points higher from here.
Being realistic, one must acknowledge the potential for a vicious crash from these levels as margin calls feed on margin calls, but there are too many people calling for $40 per share in the short term for me to expect it too quickly.
I expect an upmove here, possibly starting today. It's better to rely on Don's guitar for the short-term timing however! Don - you're a great help to us all.
EDIT - BTW, if this correction materializes, it would be our wave 4. Since wave 2 was sharply up, wave 4 can simply go sideways. In any case, the dominant trend is down right now. I still expect a wave 5 down to follow this wave 4 correction, and it should be at least equal to wave 1...i.e. a 45% fall. That would take us from the potential wave 4 target of 100 down to 55. Oooof.
More later - happy trading
j.o.
PS - Nice price action in the bonds...gotta have some. But keep a close eye. |
