Last May the 15th, just before the peak, we did a blog on this ETF in which it was suggested that it would be wise to get out of this but that we did still expect it to continue up for , perhaps, another 5 months. Almost two months have gone by and, so far at least , the chart seems to support that outlook.
What we have here is a “flat” a-b-c correction that fits in a box that, in this case, has a slight downward skew. This is a particularly well formed example and consequently it is a credible predictor of the next move, which should be up to at least a new high.
Looking at the bigchart (see previous blog) a reasonable guesstimate of where the ultimate top should come in, is around $400 or so. We know that there aren’t any bubbles, we have that on good authority. But what we also know is that bubbles occur invariable far away from home, that is in areas that we know very little or nothing about. Gullibility increases with ignorance, which we all know is itself bliss. We would not wait all the way to $400.