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Saturday, March 14, 2009

Banking Index's Extended 3rd Wave Structure




It looks correct and the extended 3rd wave reminds me of the SPX extended 3rd wave. This implies that we are indeed on wave 4(5) and a new market (and banking index) low is coming soon. If it breaks out of the 3rd wave channel with more than just noise, than I have 1 too many squiggles. But, looking at the middle portion pink structure, it looks proportional. We'll see.


11 comments:

  1. Nice dig...hard to argue with your conclusion....look for confirmation....kli

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  2. So we might not be in a P2?

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  3. The market will reveal its hand soon. But yes, my primary count is still on the side taht we have wave 5(5) to new lows.

    I haven't yet capitulated that view. Its just not a "slam dunk" as all the other waves were.

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  4. I stumbled by your site the other day. Your EW and TA analysis is sound and refreshingly unbiased. Keep up the good work.

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  5. Daneric, According to wsj.com, this past thursday and friday, they have been selling the "QQQQ" into strength

    http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow-20090312.html?mod=mdc_pastcalendar

    Hopefully the Naz don't violate the wave 1 territory.

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  6. Yeah. But the NAS traced a clear triangle in its intermediate wave (4) postion, so perhaps it has its own rules for now. In that case, there is no wave 1(5) "low' to violate. Its something I am mulling over.

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  7. Good work Dan, DO you see it flirting with the 50 EMA before any sell off.

    TD

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  8. You mean the 50DMA I have on the chart? I wouldn't think so if the pattern holds up.

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  9. Yes 50DMA (i was looking at my chart when i said EMA), From looking at your chart and mine, i think it make sense to break the 50DMA and touch the (upper down channel $30) to suck some bulls and then drop it like a stone to a new low.

    TD

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  10. Dan:

    You say the market will reveal its next sustainable direction very soon.

    What exact signs will tell us that P1 is definitely over and that P2 has clearly begun?

    Do you have targets yet for the P1 bottom and the P2 top?

    If so, what are these targets based on?

    Thanks.

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