Archive for the ‘Technical Times’ Category
A possible Drop and POP Today
I am looking to finish wave (i) this morning and then get a wave (ii) retracement.
Keep an eye on the Fireline and the Daily 55 SMA
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1-2..1-2..1-2 Now 3’s
The above chart represents a series of degrees of a wave 1 down followed by a deep wave 2 retracements.
With this last wave i down from the fire line to yesterdays low, it is followed by another deep wave ii retracement of near 76.8%. If we do not take out yesterdays high from here and all the rest of the counts are correct, this is the beginning of a series of larger wave 3’s down. Momentum will pick up to the downside. I don’t want to be long here at all. Volatility is increasing. Hang on.
What a Difference a Year Makes
Do you remember a year ago?
The market was bouncing off the March low into the July earnings reports. All the pundits were talking about about the big “Head and Shoulders Formation” that was pointing to a continuation of the selloff from the October highs and would lead to lower lows. We thought the Daily 50 […]
Diagonal Wave Patterns
This is a very interesting example of leading diagonals. Whenever I spot a diagonal I get excited because it gives me a higher probability interpretation of what to expect from the remainder of the wave sturcture.
A leading diagonal can only occur in two positions of a pattern. P87 of EWP states “A leading diagonal always appers as wave 1 of an impulse or wave A of a Zig-Zag”. This example is unusual because we have both, one after another.
It is important in this example because the wave 1 gave first indication that we were in a trend change. This structure developed after an 800 point advance from the July 2nd lows.
The “a” wave diagonal was confirmation of this change in trend because it followed what appeared to be a 1st wave diagonal and the guidlines state that it can only appear as a corrective wave.
The third wave I have marked on the chart is the barrier triangle. This is important to recognize because “a triangle always occurs in a postition prior to the final actionary wave in the pattern of one degree, ie, as wave four in an impulse”. In this particular situation, the triangle appeared towards the end of a steep selloff and is the best indication that one final wave down was about to occur and to alert you to expect a larger degree correction of the five waves down. One of the guidelines to learn is that the length of the fifth wave is generally the length of the widest part of the triangle. In this case the wave v projection was 46 points. It just so happened that the v exceeded expectations by five points. Not bad huh.