Hi, these are just ideas not recommendations, sometimes I trade my ideas, sometimes I don’t.
Always remember, yours is the responsibility for your trades,
Good luck,
Erick



Monday, February 27, 2012

Wilshire 5000 wave count

With the Wilshire 5000 I have also two long term possible wave counts:


A cycle orthodox top at 14991.68 on early 2000 with the corresponding A-B-C correction like this
V-A: 14991.68 to 7273.4: 7718.28
A-B: 7273.4 to 15938.99: 8665.59
B-C: 15938.99 to 6772.29: 9166.7
In points, the relations are B/A=1.12, C/A=1.19, if this count is correct and we are in a new long term bull market with the generational bottom at 6772.29, then any price above 14991.68 should confirm the count.
My second possible count has the cycle top at 15938.99 in the last quarter of 2007, with the A corrective wave at 6772.29 and the B ending at 14562.01. With that count we are now in wave 2 of C of a downward corrective wave.
The waves are these:
V-A: 15938.99 to 6772.29: 9166.7
A-B: 6772.29 to 14562.01:7789.72
a of B: 6772.29 to 12847.91: 6075.62
b of B: 12847.91 to 10596.2: 2251.71
c of B:14562.01 to 10596.20: 3965.81
1 of C: 14562.01 to 11208.42: 3353.59
2 of C still running: 11208.42 to 14446.14: 3237.72
The relationships are:
B/A: 0.85, slightly above the 0.79 guideline for b waves but still possible, no parallel lines connecting the end of a and c and the end of b and a start here.
b/a: 0.37, c/a: 0.65,
2/1: 0.965
I prefer this count since is less optimistic, If we are in 2 of C then this 2 is definitive a flat or expanded flat. Let’s see the daily chart for the Wilshire.


The counts are:
Wave 1: 14562.01 to 11208.42: 3353.59
Wave 2: 11208.42 to 14472.15 and running: 3263.72
2/1: 0.97, giving truth to the supposed flat or expanded
Targets for 2:
11208.42+3353.39: 14562.01 for a perfect flat
11208.42 + 1.236 x 3353.39 =15353.21
11208.42 + 1.382 x 3353.39= 15842.81
All targets are below the purported end of cycle at 15938.99
Inside 2 the waves are:
a: 13605.26 to 11208.42: 2396.84
b:11208.42 to 12158.90: 950.48
b/a: 0.397
c should be:
equal a: 13605 (passed)
1.618 a: 15086.50
Inside c:
1: 12158.90 to 13324.06: 1165.16
2: 13324.06 to 12618.11: 705.95; 2/1=0.61
3 should b:
1.618 of 1: 14503
So the targets are like this;
3 of c of 2: 14503
5 of c of 2: at: 15086.50, 15353.21 or at 15842.81
Possible wave 4 are at:
15086 less wave 1: 13921
15353 less wave 1: 14188

And remember your Welles Wilder, when the ADX if above both DI lines and start going down is a good time to take some profits

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From the Dominican Republic - Swing Trader Speculator - Civil Engineer/Project Manager - sternloinaz@gmail.com