Another Look At Wave Theory by Michael Dylan
What do the swings on a chart really mean? Maybe organizing them into groups based on their size can help answer that question.
Stock prices move in rhythms, but you never know when a price drop is a correction or a reversal. A stock such as Apple Inc. (AAPL) has been up for several years, but the price dropped sharply in August 2015, as you see in Figure 1. When you see something like that happen, you have to wonder whether the big price drop is a trend reversal or a big correction. If it’s a correction, you would want to buy, but when should you buy? I came up with a wave theory I call Dylan Wave Theory that can help determine whether a price drop is a correction or a reversal. It can also help you understand what the price swings really mean...