You’re right on your triangle targets. Take the height, subtract from the base (at break-out point), achieve price projection target. That’s near 6,700.

Doing EWT projections, if we assume that this is a standard Elliott impulse, if Wave 3 was the longest/strongest (we assume it was), then Wave 5 will approximate Wave 1.

Wave 1 was 14,200 to 11,600 which is an estimated distance of 2,600.

We then assume Wave 5 will be the same as Wave 1, so wherever Wave 4 terminates to the upside (let’s say 10,000) then that gives us an EWT target of 7,400 which is relatively week (would be sort of a 5th wave truncation).

We can also assume that Wave 5 might be equal to 1.618 times wave 1 which would be 2,600 x 1.618 or 4,200. If we assume Wave 4 truncates at 10,000 (another assumption) that would give a Wave 5 termination target of 5,800.

These are rough estimations, though, and are based on the assumption Wave 4 ends around 10,000.

If it ended at 11,000, then the equality (Wave 1 = Wave 5) target would be 8,400 (a very weak Wave 5 target) or if 5 = 1.618 x Wave 1 would give us a more reasonable target of 6,800, which coincides with your 6,700 Fibonacci target.

Thus, 6,700 would be near a confluence target (confirmed by at least two price projection methods) which would tend to be more reasonable a target.

In terms of Elliott projections, it will depend on where Wave 4 ends to run the Wave 5 projections.

14002 High
11214 Broke Support in Sept.
10353 Broke in early Oct.- not much support here
9491 Top of the range we’ve been in for a while
8426 Support just broke, retesting. Where we are today, roughly
6702 Target down .. still ahead?

Precisely! But keep in mind this is a free blog and I want to give you the tools to augment your own analysis, or cover certain developments you might be overlooking or that I find interesting. I try to keep my opinions out of it as much as I can but I’m finding overwhelming evidence – currently – that seems to point that we’re experiencing at least a short-term to intermediate term bottom at the levels attained next week. I’ll work on TLT by this evening – thank you for that inspiration.

Good call! Fibonacci is one of those universal wonders perhaps, and the more we work with it, the better we’ll be at interpreting it. Thanks for the link! Good post.

I’ll check that out and will likely do a post on it as well. Thank you for that inspiration – I look forward to seeing that development. Fibonacci analysis continues to amaze me.

Is it not the implication of your Fibonacci post that we are at a long term if not intermediate term bottom?

Would appreciate your interpretation of the chart of TLT for the last 4 months. If we are topping there then is not the case for the stock market even stronger?

I have been playing around with extensions for the last few days and have blogged on it here
http://stopsarein.com/2008/11/21/fib-numbers-pure-coincidence-lets-see/ and in a few other articles.

I’m using Telechart and I’d like to know (even privately) whether your work reflects this.