The then (June 3d) and now charts;
The predictive value of Elliott Wave never ceases to amaze me. The stock rebounds right into the area of the triangle as indicated after first dropping substantially in the b-wave of the a-b-c. We are now on our way to new lows, or, alternatively, this correction will become much more complex (don’t think so).
Here is that wedge again. We now know that it did indeed peak out on or about Oct. 8th. From there it has now dropped about 900 points in about a month, a respectable amount. It is now trading below levels first reached in April of 2012. At least 2 QEs wasted! As far as I can see there is no plausible alternative scenario that would stop this drop until we reach the base of the wedge, that is at 9750 and at this pace we could be there by March of 2013. So far we have not had the usual bounce back to the lower trend line. If we do it would be the last opportunity to get out.
The a-b-c wedge pattern shown in previous blogs may yet apply but we are out at $10 with a fat profit. From here on this may just become a normal 4th wave implying more downside.
The usual then (Nov. 29, 2011) and now harts;
At the time we explained the various paths this index could take and for what EW reasons. In the end, with the benefit of hindsight , we now know that something was complete at the lows from which a rebound took the stock back to an anticipated level of about 21500. It did so pretty well as indicated, but then transformed into a much lengthier and more complex A-B-C by adding very little to the upside but a lot in time. That should now be over and the next wave down probable already started;
Right now at 22000 this index is sitting more or less in the middle of it’s range for the past six years. For those that believe that EW is a form of witchcraft, I have added a “standard” H&S pattern to the broth, which measures to about 4000, approximately the same level EW would suggest, for instance if C were to equal A someday. In any event the wave 2 is clear as a bell so at the very least we should get one more new low below 16000 and most likely to the trendline at 14000. This is what we pin our hopes on for world growth??