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Friday, April 17, 2009

885.36 Must Not Be Breeched...

...for this to be a valid ending diagonal. Wave 3 can never be the shortest even in an ending diagonal. In theory it shouldn't really be challenging 885 and flirting with breaking EW hard rules.
I went short yesterday but it feels like fighting the tape. I've been itching to trade more than I have (extremely busy at work with an important project) and I won't chase the longside as long as this is a valid ending diagonal formation. I'll stick with my plan on adding more shorts at 876 if it is reached. But my stop losses will be set at around 880 or so.
I imagine a lot of traders have similar plans including the big boys. This is a huge squeeze opportunity for bulls if they can trigger stop losses by heading to 885. This indeed would run the tape up likely to 900-920 and eventually higher and a confirmed wave 3 would be playing out and not an ending diagonal.
So a lot is at stake in the next few trading days. The fate of this entire Elliott Wave structure. Turning it from a "sure thing" ending diagonal to a bullish wave 3 in disguise would be a brilliant bull plan if they can pull it off.
So just wanted to get that out there that this is a key area and bulls won't lie down and die I don't think....they have the "ball" and the bears are the ones who have been playing defense for 6 weeks. 845 is a key level as are all the trendlines you can see on various timecharts.
As a technician, the path of least resistance is still up and the market is still trending up no doubt. But as an Elliott Wave technician, a true ending diagonal often retraces the entire move from where it started which would be 779. Right now that interpretation is the top count. That will be nullified the second 885.36 is breeched. No emotion in that. Just hard numbers.
I don't have to work today, so I'll be monitoring the tape unless I'm out mowing the yard.


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