trendline answer

Trendlines where used to assist in the use of the Elliot Wave theory. The theory basically suggest that for a (say upward move) the trend would consist of 3 waves us and two waves down which would then be followed by a a-b-c correction before the cycle starts again for a total of 5 intermediate waves up etc until you complete the grand super cycle then the reverse happens. But yea trendlines where used to help in pinpointing where wave 5 finished and then from that you can wait for the a-b-c correction to take place before re entering. If the trendline broke to bottom line you will know the 5 ways are up and a correction is to follow, however if the stock broke the top line you then switch the graph over to a logarithmic scale and apply the same rule.

However the trendline theory was later replaced by fib ratios after Elliot’s trip to the pyramids of giza in Egypt and found the ratio to be common amongst all things in the universe and found that when applied to stocks (which is affected by the laws of chaos) it work almost perfectly and still does today if you use them properly.

Now with my previous post a user was talking about how OXR broke its trendline etc and how it was the end for OXR…………. not so it is a good thing, you wait for a correction and buy in again, this a-b-c correcting has already happen, the top of wave ‘b’ in this correction was $0.95, the recent rally from $0.77 to $1.03 was wave 1 and the recent fall back to $0.82 is a 62ish% retrace, OXR next move (wave 3) will be $1.19 and then the final move (wave 5) will be to $1.45. You may be interested to know that the recent peak at $1.15 is the top of wave 3 in the longer-term trend; wave 1 in the trend was for $0.10 to $0.62, using fib ratios alone for this move gives the peak at $1.48 and our estimates above using recent action is $1.45…………. see how it all fits in. Just got to know the fundamentals of technical analysis, thus trendlines.

Now if you beleive the above is a pill of bullshit, dont just say so, prove it wrong.


Cheers

Tejay