It is immediately clear that we are in the fifth wave of the decline.
It is possible to compute the most likely place where the fifth wave will finish.
The key question I asked myself was have we really finished the fifth wave there?
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Then we add that distance to the start of the fifth wave to get at the target.
The key, then, is to identify the terminal point of the fifth wave.
Placing a buy order near the anticipated end point for the fifth wave would have resulted in a handsome gain of over 25%.
The minor wave 5 within the fifth wave was an extended wave, i.e it has traveled a distance longer than what is normal for such a wave.
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There are typically three possible targets for the fifth wave.
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The third chart looks at the fifth wave in detail.
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Elliott Wave analysis suggests that not only will the correction be sharp, but it will go deep and can potentially reach the minor wave ii within the fifth wave.
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Usually, sentiment for a stock is most pessimistic when it enters the fifth wave of the C, but this is the opportune moment that the trader has been patiently waiting for.
"The reason why mobile technology is uniquely interesting to the world right now is because it represents the fifth wave of computing, " Saylor said, with smartphones following Internet-enabled computing, desktops, minicomputers and early computer mainframes on the timeline.
Our next step will be to figure out these minor waves, and once we are comfortable that the fifth minor wave is underway, we should exit most long positions and prepare for the inevitable sharp correction.
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The 38.2% retracement seems to coincide with one possible end-point for the minor fifth wave.
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Iis to our benefit to try and figure out where the extended fifth wave will likely end its run.
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So the extended fifth wave will also have its own five minor waves.
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When the C wave has just started its fifth minor wave down, it sets up a buying point.
When an extended fifth wave is completed, we should expect a sharp recovery back to the wave 2 level within the fifth.
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When a fifth wave is extended, we should be on the alert for a sharp correction once that wave completes its run.
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