hamsandwich... >>What sort of time frame do you have for wave 5? I remember reading a 5 month window or so in one of your past messages. Does that window still exist after the tacking on the additional 2wk ED to wave 4?<<
Wave rules tells us the following about this coming 5th Wave Rally in RMBS:
1.) Probabilities are in favor of the move exceeding wave 3's top (145), and it must retrace at least 70% of wave 4, leading to a minimum move back to 111.48.
2.) Since wave 3 WAS extended, wave 5 will not be, meaning it will be shorter than wave 3's 14 month duration (4/23/99-6/21/00). Wave 1 only required 3.3 months to complete (5/14/97-8/25/97), so we should look for something between 3.3 and 14 months for the completion of 5. Wave guidelines state that "when wave 3 is about equal to 161.% of wave 1 by price, the most likely time for Wave 5 is about equal to the time taken by Wave 1." Wave 1 topped at split-adjusted 21.5 on 8/25/97, and wave 3 at 145 on 6/22/00, or 674% distance of 1. With a ratio of 4X that stated in the guideline, my best guess is we should multiply the duration of wave 1 by 4 and that should give us the best possible guess at this point.
Unfortunately, after reviewing wave formations in all indices and reexamining that of RMBS, I'm afraid I no longer believe 4 has ended yet and 5 begun. Wave formations are currently VERY NEGATIVE on all key indices, and RMBS looks like it is in a final countertrend rally before retesting that 33.25 - 36 area yet again. The completion of the last of wave 4 lower in Rmbs should coincide with a "collapse" in the key indices, with the Naz comp piercing 1600 in the next few weeks (1585 my target). That scenario would only be negated by 2 consecutive closes back above 2471, the level I specified in a 12/6/00 post as "all important" Message 14954796 , and whose validity was borne out by the 2000 year-end close right on that number.
I personally would not get into trying to trade out of RMBS during this expected declined, but will add more when I see a sharp decline under 36. 33.25 should not be breeched to maintain form, and a break under there would target the 8/25/97 high for next major wave support. |
