xao 5 wave decline

I think weve just seen the last leg of a 5 wave decline.

other stocks with the same decline are

BHP
ZFX
PDN
OXR

my guess now is for a 3 wave correction back to 6000 ish whit plenty of ups and downs in between





5WDs consist of three downward impulses and two corrections. The first impulse (Top) corrects the up trend that carries an issue to a new high. This Top begins the price failure that completes through the second impulse (1): the technical breakdown of the stock. As with rising markets, this impulse can be very dynamic. But in most declines, the worst is usually reserved for last. As this 2nd impulse completes, a false bottom paints a comforting picture that slows the selling and brings in weak longs. The selling then suddenly resumes and accelerates into a final 3rd impulse (2) that is so emotional that prices violate set targets and reasonable support zones.

The emotion of this last wave extinguishes the selling pressure, bouncing the stock. This rapid upward motion ignites the first impulse of a significant counter trend. This strong rally then fails suddenly. As the longs brace for more pain, the prior low unexpectedly holds. A new crowd then steps in and price returns to the 1-2 trendline as a double bottom forms. The balance of power shifts and the stock breaks through that line into a new up trend.

The skilled eye can see 5WDs in all time frames, from 5-min to monthly bars. These volatile movements fit perfectly into the larger structure of greed that drives the cycle of trend through an orderly and predictable process. And the unconscious crowd behavior represented by this pattern goes well beyond the financial markets.