Trade the Cycles Example - Pediment Exploration Ltd. (CDNX:PEZ.V)

Pediment Exploration Ltd. (CDNX:PEZ.V - News), see http://stockcharts.com/charts/gallery.html?pez.v, has drawn some buzz, because, it's risen a spectacular +800%ish since late last year. Some folks are basically saying consider buying after a short term correction (what I would call a monthly downcycle or maybe a minor intermediate term downcycle).

Let's take a look at PEZ.V's cycles and Elliott Wave count (Trade the Cycles assessment), see chart two at http://stockcharts.com/charts/gallery.html?pez.v. From May 2006 to November 2006 PEZ.V did a Wave 2 major intermediate term downcycle, from the Wave 1 major intermediate term cycle high at 1.18 in May 2006 to the Wave 2 major intermediate term cycle low at 0.405 in November 2006, with a Wave A cycle low at 0.43 and a countertrend Wave B cycle high at 0.63 along the way. The price points are all labeled.

Since putting in a Wave 2 major intermediate term cycle low at 0.405 in November 2006 PEZ.V has done a Wave 3 Elliott Wave 12345 up down up down up major intermediate term upcycle, with Wave 1 up peaking at 1.10, Wave 2 down bottoming at 0.74, Wave 3 up peaking at 2.15, Wave 4 down bottoming at 1.38, and, with the third/final Wave 5 upcycle probably peaking at 3.40 on Thursday 10-25-07, see chart two at http://stockcharts.com/charts/gallery.html?pez.v. Note the bearish very large spike on Thursday 10-25-07's candle.

So, PEZ.V may (on Thursday) have or soon should enter a Wave 4 major intermediate term downcycle that should last about 3 to 6 months, and, will probably result in a similar 66%ish decline that occurred in the Wave 2 major intermediate term downcycle last year (1.18 to 0.405), which would result in a decline to 1.16ish, a reasonable target for the Wave 4 major intermediate term cycle low.

So, the guys that are saying that they're looking to buy a short term correction are very likely to be barking up the wrong tree, especially given that HUI/XAU/gold are likely to soon enter a Wave 2 Cyclical Bear Market. Got cycles?

....... http://www.JoeFRocks.com/ .