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Medium-term Technical Analysis of the Phisix
using the Elliott Wave Principle
Updated last May 5, 2006
charts are courtesy of Metastock
The chart above shows the possible Elliott Wave count
of the Phisix starting from its lows last October 26, 2001 up to the
present. The numbers in parenthesis are the possible labels of the waves
in its Primary wave degree. The numbers and letters without the
parenthesis are the labels of the wave in its Intermediate wave degree.
I have assumed the following:
End
of Wave 1 – 1479.85 (Feb 22, 2002)
End
of Wave 2 – 995.07 (Mar 21, 2003)
End
of Wave 3 – 2172.76 (Mar 11, 2005)
End
of Wave 4 – 1805.49 (Jul 8, 2005)
End
of Wave 5 – ?
If one will notice, another assumption I have made is
that Wave 3 is an extension wave. The assumptions I have made in
labeling the Primary waves are standard Elliott Wave behavior applied:
(1) Wave 2 retraces at least 50% of Wave 1 – it actually retraced by
100%; (2) Wave 3 is usually the longest wave – it is an extension; (3)
Wave 4 is usually a shallow retracement – it merely retraced by 31%.
If this were the correct wave count of the Phisix, we
should be expecting a top from the Phisix anytime now. In order to
calculate the possible high of the Phisix in Wave 5, the entire five
waves should be sub-divided into the Golden Section. Since Wave 3 is an
extension, the combined lengths of Waves 1 and 5 would tend to divide
the fives waves into the Golden Section. In this scenario, waves 1 and 5
would usually have a relationship of equality, while Wave 3 would tend
to have a relationship 1.618 the length of Waves 1 and 5 combined. With
those, presumptions, I have come up with 2731.35 as the possible end to
Wave 5.
In order to corroborate this conclusion, I looked at
the wave structure of the most recent Intermediate Waves to cross-check
if I would get the same value. Below is the chart of the most recent
Intermediate Waves of the Phisix with my presumed wave counts.
charts are courtesy of Metastock
From the way the waves were structured, I presumed
that the end of the Primary Wave 4 was on July 8, 2005. The low of the
Phisix at that day was 1805.49. From that point, I assumed that the
Phisix has begun another Impulse Wave and is now currently at its 5th
wave. In order to get the high of the 5th wave, one will
first have to sub-divide again the waves into the Golden Section.
Normally, the end of the 4th wave would divide the entire 5
waves into the Golden Section, with the 5th wave being 0.382
of the entire 5 waves. If I did that, I would come up with a value of
2297.66, which is obviously erroneous because the Phisix is already at
2470.24. The only other solution to still come up with Golden Section
would be to do the inverse, meaning, the 5th wave would now
become 0.618 of the entire 5 waves. By doing this, the 5th
wave would most probably be an extension and it will end at 2707.89,
which is roughly just 24 points difference from the 2731.35 value the
has been arrived at above.
In summary, by using the Elliott Wave Principle, we
can project that the end of Wave 5 will most likely end somewhere
between 2707.89 and 2731.35.
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