More Elliott Wave Thoughts (by Nathaniel Goodwin)

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Living alone the past week and a half has taught me that I am not much of a bachelor. I’ve
been told that I’m not the best person to be alone with, which is probably why I like having a roommate – mom, grandma or the colonel… whoever, I don’t like being alone by myself.

To curb my loneliness, I asked local street dweller Stun Gun Jones to move in for a bit. He agreed to stay until the Colonel gets back on the condition that I don’t cramp his lifestyle by making him use the bathroom and shower.

Last night I was showing him some charts with long term Elliott Wave counts, and he started that drunken laugh/cackling people hear from him all day on the street. He stated that the following EW count was just as possible as the count with EWI's P3 panning out, and warned me not to place big bets on very speculative EWT outlooks or be too firm with my beliefs on how things will play out long term.

After hacking up some phlegm and Irish Rose, Stun Gun said that there are a few safer ways to use EWT, one way is to only try to catch 3rd waves. A third wave is the most powerful or “glorious” of all waves, and a third wave can be a 3 or C – both are third waves. Wait for an impulsive first wave to appear, it could be a 1 or an (A), wait for 2 or (B) to appear.  Enter the trade anywhere from 38-61% retracement of the first wave, set stops right below the first wave. Exit can be tricky, look for divergences or whatever to exit the 3rd wave (which is either a 3 or a C, who cares!)

I have to go empty Stun Gun’s pee-jar, another prerequisite of him moving in. One other thing he told me though was that lots of folks are looking for Aug 5th-6th as an important cycle or turn date, we are also very close to the 50% retracement area from the April 26th high to July 1st low. Seems like a good place for a bearish turnaround. His advice helped me out in early July, so I’ll be taking a close look the next couple of days.