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Strategies & Market Trends : TA- Advanced GET

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To: Alton Stephens who wrote (251)	1/20/1997 8:55:00 AM
From: Gary Burton	of 1551

more on Corrective Waves---If a stock goes from say 3 to 50 and then drops say 75% from top to 12, GET will tend to measure the selloff in 5 waves rather than 3 (unless the B wave is really pronounced and obvious). This appears to be because of GET's desire to focus om 5 wave series every chance it gets.As a result, when it first detects a 5 wave down from the top, it says so-nut if the ensuing upmove stalls and then a nother new low is formed, GET then relabels and then calls the 'old' low as really W3 rather than W5---but what is actually happening is that GET was correct the first time and should have simply relabled the first 5w down move as Wave A and the subsequent upmove as Wave B -instead of a newly relabled W4. (It can be a Wave B as soon as it retraces at least 23.6% of Wave A)-----So, at the bottom at 12, the stock has either completed an A-B-C or alternatively a 'double zigzag' ABC-x-ABC. --NOT a 1.2.3.4.5. Since double zigzags are quite common in long abd deep retracements, GET will likely be lableing the 12 area as W3 when in reality the decline is over-at least for the time being.---I think this is what happened with most of the semi equipment stocks for example. The moral of the story is that GET likely does better with impulse waves to the Upside than measuring the wave count in long and sharp downtrends. Personally, I'd like to see TT address this situation although I can understand that it is not really geared to looking closely at Corrective Waves-since as Matt says it's harder to make money in corrective waves---however if GET could more accurately pinpoint when the CR is over-we would be better able to jump on board for strong uptrends---the semiequips have almost doubled off the lows for example.

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