Pediment Exploration Ltd. (CDNX:PEZ.V) Revisited, Why Cycles Are So Important
Let's revisit Pediment Exploration Ltd. (CDNX:PEZ.V - News), see http://stockcharts.com/charts/gallery.html?pez.v and see http://finance.yahoo.com/q/bc?s=PEZ.V&t=2y&l=off&z=m&q=c&c=, and I can show why cycles and Elliott Wave patterns are so important.
PEZ.V is in the process of putting in a third/final Wave 5 cycle high of a major intermediate term upcycle since late 2006, see http://finance.yahoo.com/q/bc?s=PEZ.V&t=2y&l=off&z=m&q=c&c=. The Yahoo chart is more useful for seeing where the primary multi year trendline is, partly because it's linear. PEZ.V's relatively flat primary multi year trendline is at 1.00ish right now.
PEZ.V (huge spike move) is in the process of putting in a third/final Wave 5 cycle high of a major intermediate term upcycle since late 2006 (http://finance.yahoo.com/q/bc?s=PEZ.V&t=2y&l=off&z=m&q=c&c=), that might have peaked today at 3.47 (on good news) in rollover mode versus the cycle high at 3.40 on 10-25-07. If so, most of the good news was already priced into the stock.
If PEZ.V declines by a similar -66% (1.18 to 0.405) that it did in 2006's major intermediate term downcycle, it'll decline to 1.20ish in the next 3-6 months or so from a cycle high today at 3.47, which is near or at it's primary multi year trendline.
Cycles and Elliott Wave patterns (plus gaps) are extremely useful to even the most diehard buy and hold investor, because, while they might not sell PEZ.V based upon an understanding of cycles, they definitely wouldn't be buying, unless they knew that continued near term substantial upside surprise was likely due to additional good news. The problem is, often most of the good news is already priced in, as today's appears to have been.
On a non Yahoo PEZ.V message board everyone is getting excited, and, a goofy letter writer is telling everyone that PEZ.V is a good buy and hold investment (probably is, but, he's saying it's timely NOW, when it's likely to fall -50% to -70% in the next 3-6 months), BUT, if most people on that board knew what was going on cyclewise/Elliott Wave count/technically, they wouldn't dream of buying and most would probably be selling.
The bottom line is that one very rarely (never say never, always stay flexible) should buy huge spike moves, either as an investor or as a trader. All one has to do is to look at a few charts and it's plainly obvious that one shouldn't chase huge spike moves, yet, a lot of people do it time after time and get crushed. Got cycles?
What I said before (http://tradethecycles.blogspot.com/2007/10/trade-cycles-example-pediment.html):
"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 10-25-07) 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/ .
PEZ.V is in the process of putting in a third/final Wave 5 cycle high of a major intermediate term upcycle since late 2006, see http://finance.yahoo.com/q/bc?s=PEZ.V&t=2y&l=off&z=m&q=c&c=. The Yahoo chart is more useful for seeing where the primary multi year trendline is, partly because it's linear. PEZ.V's relatively flat primary multi year trendline is at 1.00ish right now.
PEZ.V (huge spike move) is in the process of putting in a third/final Wave 5 cycle high of a major intermediate term upcycle since late 2006 (http://finance.yahoo.com/q/bc?s=PEZ.V&t=2y&l=off&z=m&q=c&c=), that might have peaked today at 3.47 (on good news) in rollover mode versus the cycle high at 3.40 on 10-25-07. If so, most of the good news was already priced into the stock.
If PEZ.V declines by a similar -66% (1.18 to 0.405) that it did in 2006's major intermediate term downcycle, it'll decline to 1.20ish in the next 3-6 months or so from a cycle high today at 3.47, which is near or at it's primary multi year trendline.
Cycles and Elliott Wave patterns (plus gaps) are extremely useful to even the most diehard buy and hold investor, because, while they might not sell PEZ.V based upon an understanding of cycles, they definitely wouldn't be buying, unless they knew that continued near term substantial upside surprise was likely due to additional good news. The problem is, often most of the good news is already priced in, as today's appears to have been.
On a non Yahoo PEZ.V message board everyone is getting excited, and, a goofy letter writer is telling everyone that PEZ.V is a good buy and hold investment (probably is, but, he's saying it's timely NOW, when it's likely to fall -50% to -70% in the next 3-6 months), BUT, if most people on that board knew what was going on cyclewise/Elliott Wave count/technically, they wouldn't dream of buying and most would probably be selling.
The bottom line is that one very rarely (never say never, always stay flexible) should buy huge spike moves, either as an investor or as a trader. All one has to do is to look at a few charts and it's plainly obvious that one shouldn't chase huge spike moves, yet, a lot of people do it time after time and get crushed. Got cycles?
What I said before (http://tradethecycles.blogspot.com/2007/10/trade-cycles-example-pediment.html):
"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 10-25-07) 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/ .
posted by Joe Ferrazzano at
9:11 AM
0 Comments:
Post a Comment
<< Home