gem-x's Elliott Wave Forecast: Feb 20 02 "Don't go chasing waterfalls"
Yesterday's action was simply awful.
From last Thursday, if you look at the 10 day chart, it just looks like a line going straight down, with virtually no upward corrections. When waves turn into "waterfalls", it gets tough to count them. It's a good thing the volume on the way down isn't accelerating noticeably, than it would be bad news....what really made the action bad yesterday, in my eyes, was that during the drop, the put/call ratio plummeted to .83. The DOW drops over 150 points and NASDAQ over 50, and the contration signals didn't follow. The VIX and VXN popped up a little, but I sure would have liked to see the put/call well over 1.20. It just looked like absolutely no one wanted to committ money to this market, but the good thing was, it wasn't a rotation from a sector to another sector (like from tech to defensive), so it looks like people are starting to throw everything out the window....the past year, you'd know that the end of the correction was
In my opinion, we're in the 5th wave down of a zigzag from Jan, and it's starting to look a lot like the correction from 1998.....the 4th wave of the zigzag us abnormally large and very deceptive, than the 5th wave down is abornmally large and fast.
I would count the move down from Thursday as: Wave 1: 1877 to 1841, Wave 2 1841 to 1852, Wave 3: 1852 to 1801, Wave 4: 1801 to 1815, and Wave 5 extends from 1815 to 1739.
1739 would be equal length to the wave down in Jan (Wave C = Wave A)
The next crucial level is 1659....if that breaks, it's all downhill from there.
We sure need a reversal candlestick tomorrow, because this correction is entering the "ugly" phase.
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