BobbyB, which Elliot wave count camp are you in?
I assume you like the bear count 38.209.4.67
more than a more bullish count
38.209.4.67
This weekly chart further inflames the situation of many counts
out there.
38.209.4.67
Prechter in his January letter has 2 targets and 2 scenarios
of what the market is doing
1---is that the market is topping right here at this 9660 level basis
the dow.
If the DJIA can blast through this level it appears Prechter is
Prepared to belive that the DJIA can go to 12983/13007.
Prechter seems prepared to suspend his disbelief and let this market
run another 3400 points if we get much past 9660.
Peter Eliades is also throwing out potential price targets of 11,500
as is Favors.
Some of the technicians are really giving this market a wide berth.
Is this the time to play contrary opinion.
Best Regards,
John
The Elliott Wave Theorist -- January 8, 1999
Special Section
POTENTIAL FIBONACCI RELATIONSHIPS IN SUPERCYCLE WAVE (V)
Years ago, The Elliott Wave Theorist observed that using daily closing figures, wave I, at a 371.62% gain, was
.3827 of wave III, a 970.98% gain. The ratio is extremely close to a Fibonacci .382, or .618 2 . This relationship may be
coincidence, but given all the Fibonacci relationships that occur among waves, it is not unreasonable to make price
projections for wave V under the assumption that all three advancing waves may bear a Fibonacci relationship to each
other.
Unfortunately, there are two complications with this exercise with respect to wave V. First is its dual starting
dates of 1974 and 1982, which means two acceptable starting levels of 577.60 and 776.92. This means that for every
possible relationship, there are two targets. Second is the psychological environment of the 1990s, which has been a
mania. In all other environments, "high" targets that coincide with trend channel lines, loss of momentum and extremely
bullish sentiment always mark tops. That has not been the case this time, as "high" numbers have kept getting higher.
In 1978 and 1982 respectively, we used the then outrageous upside targets of 2724 and 3664, where V = I = .382 x
III in percentage terms from 1974 and 1982. In the 1990s, EWT targeted the next multiple at 4010 and 5444, where V =
1.618 x I = .618 x III, and later the next multiple at 6192 and 8329, where V = 2.618 x I = III. While the first target marked
the 1987 high and 4010 provided temporary resistance throughout 1994, none of these levels stopped the bull market. It
has been a frustrating experience.
However (and this is important), it is also true that the Dow has not made a final high between any of these levels.
In other words, our hypothesis that wave V may stop at a Fibonacci relationship to both waves I and III may yet be
satisfied.
The Dow is now approaching the next multiple, where V = 4.236 x I = 1.618 x III, giving another pair of potential
target levels. Using waves III and I independently, the relationships would be achieved at 9652/9670 and 12,983/13,007.
The average numbers, reflecting a percentage gain of 1572.61% for wave V, are 9661 and 12,995.
In 1997, EWT noticed that the percentage gains of waves I and III are almost exactly 6 x 61.8% and 6 x 161.8%
respectively. If wave V is 6 x 261.8034%, then it will end at 9650.66 or 12,980.94.
Combining these numbers, we get target ranges for a daily closing high of 9660 + or - 10 and 12,994 + or - 14.
These are very narrow ranges.
The first of these targets, 9660 + or - 10, has a lot going for it. Trend channels, waning upside momentum and record
euphoric sentiment readings all scream "top," as detailed in this issue. As for the higher number, we should recall that in
1929, the final runup of 8 months' duration accompanied a declining advance-decline line.
PS: Bobby I realize that you may think this move up from 10/8/98
is a B wave after re-reading your post. I don't have an html
chart of that at the moment. |
