CBA TA update, page-1129

Thanks for your reply.

You are more or less correct in the different ways to predict the length of waves.

The answer is experience.

As I have mentioned previously, it is an art not a science.

It is a means of what to expect.

For example, after the conclusion of wave 1, I would expect wave 2 to be 61.8% of wave 1.
I would expect wave 3 to be at least 1.618 times the length of wave 1.
I would expect wave 4 to be Fibonacci related to wave 3 & if wave 3 was 1.618 times wave 1, wave 4 would be expected to be 38.2% of wave 3 but probably of length of wave 2 but different in character. For example, if wave 2 was a zig zag wave 4 could be a flat, made up of waves A,B,C of similar lengths.

Now the real art comes in predicting the length of wave 5. The most common length to expect is 38.2% of the entire length of the 5 wave structure. The was to get this answer is take the difference from the beginning of wave 1 & the bottom of wave 4. Multiply the answer 0.618 & add it to the bottom of wave 4. The 5th wave will then be 38.2% of the total 5 waves.

Look how the waves are unfolding & their relationships with each other. To confirm the existence of a 5th wave, look for divergence in the indicators, especially the RSI (relative strength indicator). If the 5th wave is higher than the 3rd & on the indicator has the 5th wave lower than the 3rd, you have divergence it indicates that the wave is indeed a 5th wave.

In the current circumstances with CBA the 5th wave has divergence, has exceed the length of 38.2% of the entire 5 waves, has exceeded the length of wave 1 & in looking for a Fibonacci relationship, the next most logical expectation would be 50% of the entire 5 waves, which is $14.95 added to the bottom of wave 4 ($124.89) = $139.84.

The fact that CBA goes ex div tomorrow evening, means that there is a change in circumstances & the shares are immediately worth $3.57 less. You do not have to be a rocket scientist to visualise the shares going ex-div to be the change in direction of the share price.

The immediate expectation of the correction would be around the bottom of wave 4 ($124.89) with a possibility of a 61.8% correction. 38.2% is another possibility but in this case 50% would appear to be most likely.