3 replies to this topic

[Porter]

The data for a potential bullish Gartley in the SPX are listed below. X = 1087.06 on 3/24 A = 1150.29 on 4/05 B = 1120.75 on 4/15 C = 1139.26 on 4/20 CD = AB at 1110 0.707 XA = 1106 1.618 BC = 1109 Porter

[PorkLoin]

Hi Porter, What's the .707 ratio? Looks to me like a "Gartley" is a move followed by a three-wave correction -- is that correct? Thanks, Doug

[Porter]

What's the .707 ratio?

(SQRT 2)/2

Looks to me like a "Gartley" is a move followed by a three-wave correction -- is that correct?

Yes.

When the setup occurs, there is a 0.618 retracement of the CD leg about two thirds of the time.

Porter

[PorkLoin]

Thank You, Porter. That .707 is half of the square root of two should have appeared to me on its own -- getting old I guess. .707 is also not far from the Fibonacci .618 and .786, nor from two-thirds so it sounds pretty good to me. You surprised me in saying that two-thirds of the time we do a .618 retrace of CD. If, as in this case, we go up from X to A, then AB down, BC up, and CD down, point D is the end of a three-leg correction and I'd think the expectation would be that the trend going into A will resume, i.e. going to A or above. Doug