To: marc chatman who wrote (52729 ) 10/9/1999 1:49:00 PM From: Gary Burton Read Replies (1) | Respond to
Marc-As you have likely deduced by now, counting waves is an art, not a science, unfortunately. Where one sees an ABC, another sees a 5w for eg. That's the frustrating thing about EW.-- Because of this, my approach is to look for clearly defined patterns, rather than trying to force a count on to a chart. If I am only say 60/40 on one count and the other would lead to a very opposite impact, I usually pass on the chart and go to another one. Who needs to guess when the odds are close and maybe it turns up tails when you guessed heads. ---In general, one usually finds waves 2 and 4 alternating in appearance. If wave 2 is a quick zigzag, for example, wave 4 will like be more complex, such that it is NOT a zigzag like 2 was. For eg, wave 4 could be an 'irregular flat' where the (a) goes up and the (b) dips BELOW the bottom of (a) and then the (c) goes back up to beyond the top of (a)--the entire formation being Wave 4. Often, if one counts 4 and 2 as being similar in shape, one's count turns out to be wrong. So, in looking at a sequence, tell yourself 'if I see a quick blip for 2, I will EXPECT a more complex formation for 4'--which is probably why the late97-late 98 sequence for HAL is really only one 5 wave sequence (where you thought a B happened, it was really the irregularness of wave 4 that crosses one up--just a thought).------I don't expect the price of oil to go back to the lows---but many of the osx stocks are within shouting distance of their lows already even with oil above 20. If oil dipped furthur to say 17ish, one could envision new lows on some of the osx stocks simply due to momentum. for eg, FGI and MDR have already taken out their lows and some others are not that far from it----Big picture--Whenever I see a 'thrust' type of one way take no prisoners significant drop, I usually assume that all blips up and down are really part of the same wave, so that at the end, it is more likely a 5 wave---And often when a 5 wave ends, it turns out to be only the A of an eventual ABC larger wave (which is how ZigZags get formed).--- It is THIS fact that worries me in here. I am concerned that the osx drop has been far too sharp and fast and one way oriented to simply be the entire correction and away we soon go to new highs. As I see it, it is 'more likely' to instead be just the A of an eventual ABC--thereby enticing many investors to now let their greed take hold of them and now start chasing the osx stocks back up but winding up near, say, 75-80ish at the top of a B Wave and therefore caught again. --V Bottoms usually don't last as they need to back and fill and put in another leg to the stool in order to gain enough support from which to launch a lasting rally.--That is the ONLY reason why I am still highly cautious in here 'right her,right now' as Slider would say----btw Slider, MDR will likely rally come Monday since the Indonesian contract has been ratified--but my reading of the chart is that the rally will likely be a wave 4 hook into the low 20's and with the 17's still waiting for the final low in wave 5---My best guess on oil is that the current drop is finished and that clx will soon rally towards 23-24 to put in a B wave and then it will 'plunge' one more time to 17-20 to complete C---at which point, it might be safe to jump in . Nimble traders of course can jump in and out during the likely B wave rally soon to start. good luck.
