Wednesday, August 19, 2009


Below are what I believe to be the most common counts out there:

UPDATE (9:20PM): I forgot to mention just by solely looking at the pattern, it looks like a pennant/flag that is not quite complete yet. Just using that interpretation alone, one would expect price to move towards the lower trend line once more before price thrusts out higher.

Whether this pattern plays out or not the original count 1) below may also take price to the same level.


1) A double ZZ for Minor B with the X wave at or near completion today
2) A 5 wave structure at minuette degree down for Minute A of Minor B

So I got to thinking. What are some out-of-the box counts (at least I think it's out-of-the box) besides the above that may be considered probable and not just possible?

Somehow the Fibonacci confluence at 965 is keeping me fixated on that level. And what's the first thing that comes to mind when you see 3-wave structures besides corrective waves? I see triangles and diagonals!

I have come up with alternative counts for these structures. However, both violate a rule if they end up being of the contracting type.

What may keep this count valid is if wave d tomorrow somehow finishes higher and maintains a 3-wave structure. If that were to occur, they both become the expanding type and those rule violations become moot.

Here are the alternatives with their respective violations:

1. Minute A of Minor B Leading Diagonal
- Current rule violation: wave 3 is longer than wave 1

2. Minor 1 Leading Diagonal (Very Bearish)
- Current rule violation: wave 3 is longer than wave 1

3. Minor B Triangle
- Current Rule violation: wave c is longer than wave a

Something to note. Should this structure turn into a leading expanding diagonal, per EWP (pg 40), these patterns usually occur at the start of market declines.


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