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Thursday, June 25, 2009

Squiggles (updated)





EDIT 945 PM: I added a chart someone had a question in comments. The chart is highly speculative of course showing a Minor blue B wave move toward 950 of an (X) wave flat scenario. Note the invered H&S I mapped.
I am learning more complex EW theory such as the rule of alternation between simple and complex wave structures. Its part of basic theory that the market alternates bewteen the two. Why? I suppose life works that way, hence the market reflects that. Don't you have moments of clarity interspersed with periods of complexity?

For instance today was a simple 5 wave move, a very good structure. The corrective waves since today's high therefore appear to be complex including a possible [B] red wave expanded flat.

I look for a backtest of 908-911 support. Then a move toward 927 resistance area. A push above could occcur and then of course my count calls for the double zigzag peak. If this pattern played out and the market pushed to 931 or so, look for a downward corrective move of the entire push up from 888.

This all supposes that 956 is not P2 peak. If 956 is the P2 peak, than just the opposite will happen. 927 will not be broken and a big bear wave down is coming (I do not completely rule out the alternative until the waves cancel that option). And 927 is the keystone.

See how simple that logic is? We can afford that luxury at the moment.

Should be a fun day tomorrow.

16 comments:

  1. Thanks for your squiggles. Great work!

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  2. Can you clarify this statement:

    If this pattern played out and the market pushed to 931 or so, look for a downward corrective move of the entire push up from 888.

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  3. Yes. 931 would be the top of an [a] wave, so a [b] wave backwards would correct the move from 888 to 931 back some 38-62%. So after 931, a 50% retrace would take it back to 910 or so. Then it would be move up again toward 950 at least in a [c] wave.

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  4. I added a chart to show what I mean

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  5. Dan, what do you think of 921 being the peak of 3 as opposed to 5? I am thinking in terms of symmetry since wave 1 was 14 points. A move from 906 to 921 would be 15 points and if 914 was end of 4 then add 14 to 914 (or 912 as your retracement suggests) and we would get 926-928. I guess the conclusion is that this wave is ending up in that area but I am suspecting the ABC move from a higher level and that would fit perfectly with the 940 backtest.

    I guess tomorrow's wave behavior will tell.

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  6. Could be Rick. The top alternate would be a 5 wave move up from 888 if a high made it higher tomorrow.

    But even if its some kind of wave 1, you'll get a wave 2 pullback (or B wave) and a bullish wave 3 (or C wave to peak)

    So the beauty of it is that even the alternate count will follow the same basic moves in this case.

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  7. Thanks Dan. Btw I think you should offer a subscription based service of minute to minute squiggles in real time, many day traders would pay top dollar for that.

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  8. Do you think that we will get back to 888?

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  9. I'm all over the ending diagonal...maybe we poop higher...your Y seems right, but am looking at a different fib to 925 max tomorrow.

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  10. Dan,

    What are your thoughts of us getting a Minor B wave triangle for a bearish count? Starting from 927 as Minute [a]?

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  11. That would be an X wave triangle because Minor A would be W because it traced a 5-3-5 zigzag down from 956 to 888. So what your proposing I think is a double zigzag lower with an X wave triangle.

    That is a possibility too which is why I left the possibility that 888 was a minor "W"

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  12. The Bear downtrend channel held all the way through P5 in the 2000-2003 Bear.
    http://social.stocktock.com/photo/20002003-bear-channel

    The 2007-201X channel likely will hold too:
    http://social.stocktock.com/photo/20072010-bear-channel

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  13. Schweizer. I went to your link and found the 20072010-bear-channel but could not find the 20002003-bear-channel. could you point me to it. TIA.

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  14. Thank you for the clarification and the additional chart!

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  15. Slight pullback on 60m indicators (unless they want to remain overbought and then the oversold dailys take over. EOM window dressing and low vol holiday week should allow for more and easier manipulation to the upside. It should be that simple. Then the weeklys have the divergence they need for a stronger push south.

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  16. It's sad to see Michael Jackson leave... It's sad to see the market keep pushing to the upside...

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