The other thing I noticed is that each sell off over the past five years (excluding the 2006 selloff from January to December) have been 13 to 20 weeks long. We are in week 15 of this current selloff. Again, I am only looking at probabilities and patterns and this is just another one of those that supports the other data.
If I had been involved with ECCI last year, I would have been a buyer at .10 because that had been support for a couple of years and rallies had ensued from that area. Since that support level was broken last year, it has now resulted in that .10 area being resistance.
I think if the first part of August remains calm, hurricane wise, that this will provide the impotus to continue the selloff for another few weeks into the .015 area (perhaps even a shakeout slightly below that). But like a coiled spring the more shorts that jump on it at .02 and lower the more explosive the potential of the short covering rally if and when it occurs.
So as far as length of selloff we could go into late August early September and be in line with the January 04 and September 05 selloff (20 weeks in durantion) or we could start Monday morning and be in line with the January 03 (13 week selloff) or June 04 selloff (13 weeks).
Only time will tell.
Peace,
T
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