Sand Spring Advisors LLC

Math Is Everything

January 29, 2002

by, Barclay T. Leib

Anyone who hasn't seen the movie A Beautiful Mind should. Anyone who has already seen the film may look at the above hodge podge of lines -- drawn on top of the weekly chart of Dell Computer -- and think Barclay has moved in the direction of Professor John Nash.

In reality though, all these lines are simply math at its best -- beautifully at work. From the ratios of Fibonacci, to the angles of Gann, to the elegant structure of Elliott, it's all there -- and it all points to one more horrific descent in Dell toward approximately an $11.80 target.

Note in particular the almost perfect recent A-B-C rally that has brought prices back toward the prior 4th wave high. Indeed, the entire decline in Dell has been an almost picture-perfect example of Elliott wave theory at work, with no overlaps where they shouldn't occur, and a clean easy count. At this point it is clear that any person willing to risk a short sale stop-loss above the wave i low at $36.25, has a shot to ride a 5th wave down, down, down.

Who knows? Maybe Dell will be the next Texas-based company to follow its Enron brethren and get caught with some sort of financial chicanery.

If that does happen, it has all already shown up in the math, the form, the structure of the chart above. Someday someone far smarter than I will likely win the Nobel Prize for explaining why financial markets behave like this. All I know is that financial markets most certainly do.

Dell is sending us an encrypted message here about the entire market, and it is not a positive one yet.


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