December 5, 2007
SPY Fifth Wave Decline Price Targets
Checking up on SPY after it recently completed Wave 4 and has begun its Wave 5 decline. It should drop to at least $138 - $139 and may fall all the way to $132 - $133. I’m not an expert on idiot waves, but when I squint at the chart this is what I see.
Cat: | Time: 1:40 pm (utc+8)
December 5th, 2007 at 2:06 pm
That interpretation is open to considerable interpretation; considering the high at the number 4 is higher than the previous high. So it’s just as likely that you get a higher low (that is higher than the number 3), and then another higher high.
http://www.candlestickwarrior.com is an interesting site with some good technical analysis rules, for brushing up on candlestick charts.
December 5th, 2007 at 2:17 pm
contrcan: You lost me. The high at number 4 is higher than what previous high?
December 5th, 2007 at 2:30 pm
There is an overlap between wave 1 and wave 4 which is only OK if the whole larger wave is an ending diagonal. But it doesn’t really look like that. Also the putative wave 4 is pretty impulsive rather than correctional looking. My guess it is wave C of a larger correctional wave and we are only roughly halfway through the overall decline from the October highs.
December 5th, 2007 at 2:50 pm
moom: OK, so you’re saying wave 4 can’t go above the low of wave 1, yes? Good thing I don’t know the rules.
December 5th, 2007 at 3:08 pm
For a conventional wave yes that is the case. If the wave is an ending diagonal overlaps are expected. But then each of the waves 1 to 5 should 3 subwaves instead of 5-3-5-3-5.
December 5th, 2007 at 4:16 pm
sounds like reading tea leaves.. ;-))
Markus
December 5th, 2007 at 5:30 pm
Buy SDS ultra short etf on s&p 500. I have had mixed results trying to time market and got murdered on chinese short.Hard to time this goofy market.
ike
December 5th, 2007 at 8:52 pm
Are you sure that what you’ve labeled as the start of wave 1 isn’t actually the start of wave 3? Perhaps you should back up the chart to show a full year, and label all the previous waves …
If you make the chart weekly and show a full 3 years, you’ll see that we’re tracing out a “5 beaks and a feathered chicken” pattern, and about to start wave 41, known as the “totally gnarly wave, dude!”
Zoom out to show 75 years, and you’ll see we’re a “chicken-fried Kondratieff winter” pattern, and the downside target for the S&P is 321.25.
December 5th, 2007 at 8:59 pm
As one I wave vendor once commented on his analysis.
The next move looks to be down, though the stock is presently doing nothing and a move higher should not be dicounted.
December 5th, 2007 at 9:33 pm
I know, I know, it ain’t called the idiot wave for nothing, but let’s reserve judgment until it’s proven dead wrong (likely!).
December 6th, 2007 at 11:40 am
I like your theory in comment # 10… that’s the market — today’s candle and close above the 50ema says a lot…
December 6th, 2007 at 1:44 pm
inspired by Andrew’s quote in comment #9..
i’ve read that MaoXian means “take a risk” .. that risk is the price you pay to find out if you’re correct or wrong.
the trading game gives better odds than the 51-49% blackjack table — if and only if your parameters make it so.
December 6th, 2007 at 2:10 pm
And don’t forget to rescue your forecast with the technician’s basic cop-out: if it doesn’t go as your idiot waves predicted then just say that that’s telling us something more important!