The chart on the left is from Sept. and was not published on this blog. On the right is today’s chart, this time on a semi-log scale. We believe the chart on the left has the wrong EW count in it as the stock would need to drop well below zero. Consequently we will go with the one on the right. Corrections invariable take the form of an a-b-c, most often a zig-zag which is an a-b-c in the most simple form. However this can be repeated once or twice to form a double or triple zig-zag. The chart on the right suggest that we had a double zig-zag, i.e. an a-b-c X a-b-c . It seems unlikely that this would still morph into a triple, simple because there is so little room to do so. Looking at a longer chart one could make a plausible case that this is far enough, $67 to $11 is a fairly serious correction after all.
The line shown is where the bottoms were over the past 25 years, a lifetime practically speaking. If we go with the other count the recent drop would become a wave 2 and should not go below the lows. Given how close we already are the practical approach would be to stay with the trade.
