Wave analysis is as much a work of art as science! It is constantly a work in progress. Yet we can get some very useful clues by spending some time with the charts. Take the Euro for example. We are at sort of cross roads. Are we going to rally all the way to 1.3600, or are we going to fail around 1.2850 and come off towards 1.17? My guess is the latter. Take a look.
Today I came across a report where an analyst was calling for BP to reach 730 pence from its current level of around 575.50. However, from an Elliott Wave perspective, the outlook for BP doesn’t look so rosy. I am of the view that we are headed a lot lower. Take a look at these two charts. The first chart on BP shows that wave 3 was extended, being 3.618 times wave 1. We also see that wave 4 was an irregular correction, which follows the elliott guideline of alternation. The 2nd chart confirms that the 5-wave progression was finished around 722 and so a full-blown correction was due anyway. Wave A of the anticipated 3-step correction was finished and we also got a wave B before the oil spill news hit the market. So we have probably embarked on wave C which has targets at 310.
Updt: 7 May 2010: Someone asked me a question about the 5-year time frame for the correction. Remember, that time runs from the top of wave 5 (at 722) and not just for wave C. As that top was posted in early 2006, the correction will last at least till early 2011.
Update on 29 August 2019:
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