Elliott Wave 5.0 "Reboot"

Saturday, March 5, 2016

HDGE A Great Contrarian Indicator: Has it Crashed Far Enough?





The HDGE has crashed far and rather very fast without a good correction.   It is at a point where it would have to go below zero to play out a much bigger impulse wave structure. Any event to zero would be fixed with a simple inverse stock split. Any inverse stock split would not happen until it got closer to the $5 mark or lower.  

With such a fast move down this has the pattern of a correction in progress or already finished and if that is the case, then the HDGE should soar to new highs one more time. It is just short of closing a gap, but gaps can act like a springboard just as well. At $10.75 this gap would be completely closed with no other open gaps remaining. To no surprise we have several or more gaps open above the present price, and my bet is that all the gaps will get closed in the next 3-5 weeks.

Any rally to new highs can work with either a 3 wave or 5 wave pattern, but it is not critical which pattern we will get at this point. 

The HDGE is one of the best inverse contrarian indicators you can watch, and many times I don't have the time to keep a good wave count on it.  Either way I usually turn very bullish in my thinking, when I see something crash like this. Catching a falling knife is what Elliott Wave trading is all about. 

Running away from HDGE at this point due to fear is what keeps investors away. A month ago contrarians sold HDGE but it will be interesting to see if they are starting to buy again.