Once more AXC produced a close to paradigm Candlestick "Morning
Star". The three days of 12/1-3 on high volume ended on a strong
upthrust into the body of the first day's candle. Curious about
the three day's volume, I viewed the data from a 3 day chart and
came up with a perfect long shadow "doji". Here, occurring after
a defined movement, a powerful one day candle signal.
I would not dismiss these patterns too lightly. The volume is
the corroborating factor. By the way, to see a perfect "Evening
Star", look at WX for 12/1-3. However, note the relatively
smaller total volume; the likely action here is a slow turning over
for WX.
One theme I've noted the last few days here is that tax selling
will be pressure until year end etc. Don't count on it. This market
will confound. Tax loss selling could very well be over. I've read
where it now starts in October with December being the anticiptory
speculative buying ... surprise?
This leads me to my last point. I've thrown some new Elliot Wave
software at AXC (one capable of auto wave counting - an amazing
feat but one admirably suited for a computer) and have come up
with interesting results.
Tentatively, AXC is in a large correction (what else) but more
importantly, by the analysis of the subwaves, it is still in
an extension wave 3 (here 1 3 5 down 2 4 correct up). The
implication is that we will have a recovery as wave 4 up into
roughly $5.00 level but then can expect one final swoon as the
number 5 wave down (a kind of retest of these lows). However,
since wave 3 was / is severely extended, wave 5 , by rules of alternation should be mild (eg. see wave 1 from 6 to 7 as the
potential correlate to wave 5).
This new Elliot Wave software has really got me going. I first
looked at Elliot 25 years ago, but to prepare charts by hand
and then to teach yourself how to count waves was too much
for me then. But not now!!!! For those of you who wish to
dabble in these arts see www.elliotwave.com or www.prognosis.nl
(which is the one I am using). Also the Nov 97 edition of
Futures Magazine (Vol XXVI 13) has a decent summary of the
luminaries of that time. One must realize that in today's time
science and computers (and maybe entertainment and sports) attracts
the brightest minds, then it was the stock market. |
