At the beginning of January, we said we favored the prospect of a small-ish bounce, to be followed by a renewed push downward. That corresponded to scenarios #2 and #3 shown in blue on the chart below.
On January 23 we pointed out the entry opportunity for a short trade near the top of the channel and the 1700 area. Alternately, one could consider entering upon a break of the low at 1628. Note that our projection for the c-wave drop was below 1400, lower than most traders thought was possible.
In late April, it was clear that our short trade was working. We revised our targets for the short trade to an area near 1216-1240.
At the end of June, we thought the down move was nearing completion. (We were wrong about that.) However, we also cautioned against taking a long position prematurely. This would have been a good time for a trader to exit a short position.
By the end of July, we still thought a new low was needed. (Our suggestion that the 1415 level could indicate a prolonged rally turned out to be a false step. Price eventually surpassed that level by a little bit. Fortunately, by the time it tested that level in September, we had changed our forecast to treat the rise as yet another short entry opportunity.)
At the end of August, we were back on track, suggesting that traders could look for a move into lower lows. That worked out nicely.
By mid-September, we had pretty much ruled out the idea of a continuing rally, and we were clear about looking for deeper lows.
In early October, we forecasted the next downward target at 1181, which ended up becoming support on December 31. This Gann stuff really works!
Now we’re looking for a new and probably final low sometime in the first quarter of 2014. Our forecast can be found here.
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