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Saturday, December 12, 2009

The Wilshire 5000 Hourly Chart

I like to use the Wilshire 5000 to track waves to see what overall is going on. It makes excellent waves and combines all the indexes into an overall pattern that is usually remarkably solid.

I believe we have had 5 waves down from the recent high in which wave i and iv overlap. In this instance it can only be a leading diagonal or an ending diagonal. I have, for the last few days, supposed that it is a leading diagonal. This supported the move off a major top. However that count as a leading diagonal is in dire jeapardy because it appears we had 5 waves up from the recent low.

Another reason I supposed it was a leading diagonal as opposed to an ending is that ending diagonals occur in "C" waves and I was unable to imagine a C wave in this position. However I took a fresh look at the Wilshire chart again and realize that it could be a [c] wave down. This is achieved by making the [b] wave an expanded flat.

So the count I present is a Minor B wave flat with a complex [b] wave expanded flat for its middle wave. It all works rather well I must admit.

Another reason the 5 waves down counts better as a [c] wave is because the 5 waves was a falling wedge shape which works well as a "final" wave in a corrective pattern. A leading diagonal off of a major top usually is an expanding pattern, not a wedging pattern.

Additionally if I mark the Wilshire high as the "top" of C wave, it will have only expanded 43% of the "A" wave which is not a very satisfying relationship and is a bit stunted. Also the entire ABC Intermediate zigzag will have been fairly short in time as compared to the other 2 zigzags in the triple intermediate zigzag count to P2 peak.

Objectively, overall this count I present probably satisfies the most guidelines and rules for an EW count and I would be remiss not to show it.

So the 5 wave move off the top is either a leading diagonal or an ending diagonal [c] wave. And I must admit it counts better as a [c] wave in a Minor B wave flat. Also time-wise, it would be more satisfying if the Wilshire achieved a better expansion for its C wave.

Now we wait and see what the market decides to do.
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