Kase on Technical Analysis Workbook, + Video Course

CHAPTER 10 Forecasting Techniques: Waves and Projections

ANSWER 10.1   MMM Monthly with Swing 2 Labels

1. See table below. I ignored the 90.0 and 95.46 swing highs because the first swing high, 98.19, is higher than these levels. Starting from X, one would only connect to highs that are higher than the initial Y, 98.19.

   X	Y	Z
   1	40.87	98.19	68.63
   2	40.87	140.43	123.61
   3	40.87	146.43	138.43

2. To determine the impulse projection, Target = Z + a(Y – X), a = (Target – Z)/ (Y – x). a = (146.43 – 68.63)/(98.19 – 40.87) = 1.35. This is close to the Intermediate target (1.382) of 147.85, and within 0.96 percent of the actual 146.43 high.
3. To determine the corrective projection, Projection = Z + a(Y – Z). a = (Projection – Z)/(Y – Z). a = (147.85 – 68.63)/(98.19 – 68.63) = 2.63. Phi squared, 1.618 squared = 2.618. Thus the 146.43 high fulfills the P2 projection, which is actually 146.00, within 0.29 percent.

4. See table below.

   X	Y	Z	Target	Price
   1	40.87	98.19	68.63	L	161.38
   2	68.63	95.46	86.74	X	160.90
   3	81.99	140.43	123.61	S	159.73
   4	123.61	146.43	138.43	E	161.25
   5	123.61	146.43	138.43	P2	159.37

5. The next major resistance point might be around 160.5, the average of the targets in the Price column above.

6. See table below.

   X	Y	Z
   1	40.87	146.43	138.43
   2	68.63	146.43	138.43
   3	81.99	146.43	138.43
   4	86.74	146.43	138.43
   5	123.61	146.43	138.43

7. See table below.

8. A price of around 124.7 is the 21 percent retracement ...