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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: marc chatman who wrote (42823)4/21/1999 8:50:00 AM
From: Gary Burton  Read Replies (1) of 95453
 
Marc--a 5 wave sequence is the mark of a bull market, a 3 wave is the mark of a retrace against the main trend....The only rule in EW is that 3 must not be the shortest up wave. Roughly speaking, I would say that 70% of the time 3 is the longest, 30% of the time 5 is the longest and 10% of the time 1 is the longest. So, I don't want to see wave 1 longer than 3 as it would be a sign that the sequence was not going to evolve into a 5 wave but more likely a 3 wave ABC (which is bearish)...That being said, the OSX rose from 47.5 to 71.5 for hopefully wave 1 (+24pts). then it retraced in an ABC to 60.5. Hopefully that was wave 2...Wave 3, however usually is the longest wave AND also often 'extends' (it does a 1-2-3-4-5 but the 3 is itself a i-ii-iii-iv-v so the wave stretches). I think the OSX Wave 3 will turn out to be (i) from 60.5 to say 78, then (ii) back to say 69-71, then (iii) towards 100 etc etc. I don't think this wave 3 will go straight through 78-80 and on its way past 86ish (where 3 is greater than 1) in one fell swoop.......Taking the bearish alternative, IF this "wave 3" from 60.5 eventually peaks<86 and then OSX prints below 60.5, then the formation will have changed from a 1-2-3- into an A-B-C and will be a sign that the original downtrend was resuming. I don't expect that to happen at present
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