This blog introduces a new way to analyze the stock market. The 5 Wave Model uses relationships between up and down movements, or waves, in the price action to determine turning points in the market.
All the attempts today to close above SPX 1372 failed. How are they interpreted, and how do you arrive at the timeline for wave 3? Very close to May expiration of 5/18. One of the better opinions I've seen without the hype. Also isn't it bearish that we did not gap down hard/washout, and then rebound hard, as opposed to the choppy back and forth failed attempts at 1372? Isn't that bearish consolidation?
Thanks Vinnie, I appreciate the comments. My model is based on specific relationships between waves. If we are correct in our interpretation of Friday's action into today, there is a limit as to the length of a wave. I had been looking for a bounce to around 1375, and the termination point of the inverted corrective wave was very close to that, which would seem to validate that interpretation. Again, my model is more price based than time based. I placed the termination point of wave 4 where my price projection met the trend line forming with 1422 and 1415. Waves 3 and 5 were placed where my price projections created a trend line from 1357. I believe, as you say, that the action has been bearish. I am pretty comfortable with my 1331 wave 3 projection. Should we not rebound near my wave 4 projection, I think we could go quite a bit lower. I believe this is a correction of a 5 wave uptrend from 667, so the correction could be quite severe. I have been being conservative, and have been looking at different corrective waves that could carry the SPX back above 1422, but there is the possibility that will not materialize, and the market could fall further.
All the attempts today to close above SPX 1372 failed. How are they interpreted, and how do you arrive at the timeline for wave 3? Very close to May expiration of 5/18. One of the better opinions I've seen without the hype. Also isn't it bearish that we did not gap down hard/washout, and then rebound hard, as opposed to the choppy back and forth failed attempts at 1372? Isn't that bearish consolidation?
ReplyDeleteThanks Vinnie, I appreciate the comments.
ReplyDeleteMy model is based on specific relationships between waves. If we are correct in our interpretation of Friday's action into today, there is a limit as to the length of a wave. I had been looking for a bounce to around 1375, and the termination point of the inverted corrective wave was very close to that, which would seem to validate that interpretation. Again, my model is more price based than time based. I placed the termination point of wave 4 where my price projection met the trend line forming with 1422 and 1415. Waves 3 and 5 were placed where my price projections created a trend line from 1357. I believe, as you say, that the action has been bearish. I am pretty comfortable with my 1331 wave 3 projection. Should we not rebound near my wave 4 projection, I think we could go quite a bit lower. I believe this is a correction of a 5 wave uptrend from 667, so the correction could be quite severe. I have been being conservative, and have been looking at different corrective waves that could carry the SPX back above 1422, but there is the possibility that will not materialize, and the market could fall further.
Steve