The difficult to read "irregular top"...
What's going on, might you ask..(This is a from my DrBob post, I'd appreciate any opinions on this post. )
From 1973.70 to 2180 looks like an irregular top of the wave 1 of wave 3.
Irregular tops rarely happen, and in this case, it happened.
what would have been bad is if there was a "truncated" 5th wave, if the move from 2140 stopped short of 2180, but it broke 2180, barely.
Looking at the NASDAQ chart, the assumption would have been that after a test of 2118-2125, the wave 5 would be the same length as wave 1, but as a result of the wave 5 being really small, it ended up being an irregular top.
Irregular tops have odd retraces and odd tops, and the wave 5 aborted at 2181.
But with this irregular top, the move from 2180 to 2140, is defined as Wave A, Wave B would be defined as 2140 to 2181, and Wave C appears to be 2181 to 2002-2004.....
It looks a lot like Wave 2 of the 1973.70 to 2181 wave 1.
The chart has defined a full A-B-C corrective wave from 2181 to 2002-2004, with Wave A being, as earlier stated, 2180 to 2140, Wave B 2140 to 2181, and Wave C as 2181 to 2002-2004. The wave count of the 175-178 point loss have been A-B-C, and the volume has been very low, in fact, 2 consecutive days being "lowest volume days of the year."
Wave 2's aren't necessarily .500/.618 retraces...a wave 2 often corrects a large portion of wave 1, but NEVER the entire wave.
So 1973.70 is very very crucial.
With the irregular top being identified, here are the possible scenarios for Monday and next week.
Keep in mind, there's been 5 waves down from 2181, and A-B-C have all been defined as an irregular top.
1.) Monday, 1973.70 gets broken, bounces, than makes a violent attempt at the .618 Fib retrace of 1619-2328 to 1895-1900, than rallies huge. This means that 1974.70 to 2181 was a Wave B, and the real rally has yet to begin this month.
2.) NASDAQ makes a weak attempt at 1973.70-2000 on Monday, and that weak attempt gets met with large buying and starts Wave 3 of Wave 3.
3.) Monday-Tuesday, a warning rattles the markets again, which results in a wicked re-test of 1619. (Doubtful.)
I'm going to reitirate my stance of the market.
I believe strongly that 1619 was the final low, and that we're in a bull market.
The correction we're seeing as the retrace of wave 1, which was 1619-2328, and we've already got the full correction.
Looking at the comp charts since March 2000 up to now, that was the full A-B-C corrective wave, with Wave A being 5120 to 3250, Wave B being 3250 to 4250 and Wave C being 4250 to 1619. The wave counts fit perfectly into place as a perfect A-B-C 5-3-5 zigzag correction.
About BRCD QLGC EMLX and RFMD.
Yeah, things look bad due to EMC, but there's good news.
EMC appears to have finally completed it's entire correction with today being the Wave 5 capitulation wave drop. The downside risk is very low, around the 19-20 level MAX. EMC's charts has been awful for months, so the pre-announcment should not be construed as a "shock". It hasn't had a large bullish wave whatsoever this year, and this capitulation wave could be the final drop in this stock. The chart is awful, and it's been forecasting EMC being in the crapper for months.
BRCD's drop to 31.38 was an absolutely dead on perfect .618 retracement of 16.75 to 55, and the drop from 45 to 31.38 was exactly 5 waves, which means that Wave A was 55 to 36, Wave B 36 to 49 and Wave C is 49 to 31.38, which defines this move as Wave 2.
EMLX may have a bit more downside to 26, but appears to have stabilized, due to 5 waves been completed.
QLGC has the most bullish chart of the three...if QLGC does not break 46 next week, the bounce could be very large.
RFMD went down in sympathy with the AMD warning, and must NOT break 19.15. Again, 5 waves have been completed on RFMD, but we'll have to wait until Monday.
I bought calls in these 4 stocks, and am confident that by July 20th, they'll all be above my strike prices.
RFMD, EMC and VRTS all report that week.
The Elliott Wave on those 4 are still reading favorably and hasn't broken down.
Any further pullback next week would be WAve 2, and not a drop to new lows, so watch the pullback carefully, and |
