Landis82 Let me clarify . . . The correction of Wave 1 ( this morning's gap up ) was 38 points. ( ie. Wave 2 was 38 points ). After the late afternoon highs up around 954.75, the followers of EWT were looking for a Wave 4 pullback . . . We got that down to 926 after the FED announced its rate-cut and it so happened to be a fib ratio of 78.6 of the Wave 2 pullback of 38 points from this morning. From the end of Wave 4 at 926 ES, you could then project new highs for the day by using the length of Wave 1 from this morning, which was a little shy of 50 handles, targeting 973.75 on the ES. It's simply extensive use of fib ratio's and comparing legs ( waves ). I'm sorry if I wasn't that clear initially. Just not enough time to post. See chart below Thanks, makes sense now!
I appreciate the help, but there is a method to my madness. I disagree with you regarding the economy and consumer debt though. College students are maxed-out out on debt, but when they get jobs (including low paying service sector jobs) their credit will be raised and they can continue to accumulate debt, which helps the economy grow. The penny pinching days of the pre-Reagan era are over. This is why a buy and hold and 'buy on the dip' strategy has worked so well since 1982 and will continue to do so.