Teaching Inga the ABC’s

• Posted by Greg Harmon
• on January 25th, 2013

Gratuitous Photo

It is cold. I mean arctic cold. Single digit temperatures with negative wind chills and the lake effect snow keeps coming. Winter has set in. Makes you think of those blond hair blue eyed Swedish ski bunnies and how you plan to cozy up to them at the chalet. Well if you need an ice breaker I have just the thing for you. Offer to teach Inga her ABC’s. No I am not suggesting you try to teach her English, hers is probably better than yours. But show her the chart of the Sweden iShares, $EWD, and walk her through the Harmonic AB=CD set up that is playing out. You are guaranteed to hit it off with her and maybe make a little money as well. Take a look.

The AB leg from the June low to the September high pulled back 50% to C. This sets up the completion of the CD leg at 33.15 in the beginning of March from a Symmetry perspective and and tops the Potential Reversal Zone (PRZ) at 33.22 on the inverse of the BC pullback extended higher. That is a tight PRZ, and it is also 7.2-7.5% above the current levels. You might want to wait until later to tell her that this is actually a bearish set up looking to target a reversal as the ski season will be mostly done by March.

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Dragonfly Capital Views Performance Through January 2013 Expiry

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