short term ta, page-3

Thanks for your interest on this one, Dirt.

EW analysis is not my strong suit even though I have read widely on the subject. I largely wrote my prior musings on the AIM wave count to have it as a permanent record from whence I could regularly check how my wave count prediction was turning out.

To be honest I wont be all that interested ( except in an academic sense ) where the wave 5 finally finishes. By then I wouldve moved on...

There are many methods to estimate roughly where the Wave 5 ( if true ) will finish. These are two I use in buying shares to estimate a reward/risk ratio but they are equally valid in bearish markets.

1. EW guide line: Wave 1 is approximately the same length as Wave 5.

Length Wave 1 = ( 38 - 28 ) = 10c

So end wave 5 = Wave 4 end price - 10c = 28 - 10 = 18c

2. The Swing Target Method. Briefly this method is based on the premise that "the future is based on the immediate past" and so therefore the next price swing will resemble the previous swing in the same direction.

To cut a long story short if you can see a three leg price swing formation with P1, P2, P3 and P4 being the actual swing prices the relationship is P1 + P4 = P2 + P3

If you refer to the AIM chart the 3 leg price swings are:
P1 = 32.5, P2 = 20, P3 = 28 and P4 being the target price. ie P4 = 20 + 28 - 32.5 = 15.5c

So there are my best estimates of the depths that AIM might plummet to if the impulsive Wave 5 proposition proves true.