Sunday, May 2, 2010

5/2/10 - Examination of an Ending Expanding Diagonal

**Note: Based on the comments below to this post, I want to make sure it is clear what I am trying to present here. All I'm saying is if this final structure near the top here is supposed to be an expanding diagonal (not my preferred count), it could not have ended at 1219.80. 

Because expanding ending diagonals are rare per EW, this is not a high probability option. But should it turn out to be one, my option above implies that this structure would end at new highs and that it would most likely only signal an end to Minor A. **

First off, my preferred count at the moment is found here. Second the expanding diagonal pattern is considered a lower probability pattern per EW.

I just wanted to address why I believe that 1219.80 cannot be considered the end of the leg up from 1044.50. I believe there is a  greater probability that that end occurred  at 1191.80. I have it labeled as 1 in orange.

The chart above shows two potential counts.

The green count has a Minor A top at 1191.80 and the structure to follow is a flat for Minor B. Minuette (c) may have completed at 1181.62 or it is still in progress and may take on a length at any one of the Fibonacci levels as it relates to (a).

The second option on the chart is the expanding ending diagonal. I'm not sure if I have seen another version of the count that has it ending at 1219.80, but if there is, I have provided commentary on the chart as to why I do no believe it is possible to count it in that way.

Per EW, wave 5s in expanding ending diagonals are always longer than wave 3. In this case 5 is shorter than 3.

Per EW guidelines on this pattern, wave 5 usually ends slightly before reaching a line that connects the ends of waves 1 and 3.  In this case, this does apply, however, the rule has been broken.

Now moving on, it is still possible to consider the expanding diagonal, however it may still be in progress. We may consider wave 4 in progress or it ended at 1181.62 and 5 is now in progress.

If the smaller expanding diagonal count is to be confirmed, the market must drop in a dramatic fashion tomorrow. However, if key support levels (1180) are held, then refer to my preferred counts for some possible directions or the green count on the chart above as another option.

Thank you to Kazoom from the CiL for bringing the larger expanding diagonal to my attention. (Sorry Kazoom if that was not you.!)


  1. hi Grand,
    1). i don't think your orange 1-2-3-4-5 is an expanding diagonal. does EWP provide guidance for an expanding diagonal? i only see one chart Fig 1-19 with minimum text involved & no guidance, and the title is "possible" expanding diagonal.
    trust me, i've lots experience with expanding diagonal, but not your orange one.

    2). if you insisted to look for B-wave here (which i am not a fan), maybe you can try the expanding triangle (not diagonal). starting your orange 2 as wave-a, 3 as wave-b, 4 as wave-c, 5 as wave-d, 1181's as wave-e to complete the B-wave.

    for some reason, Sunday night, i try to post & talk to you for the past 2 hours+ (19:30~21:30et)at CiL, posted over 10 messages over the time frame, but non shown & i can't enter. at least 4~5 producers were there chatting.

  2. Humble,

    thx for the comment. i'm afraid my post is not clear so i have failed in trying to convey my thoughts as these are alternative counts. remember the above is not my preferred.

    the ending diagonal option that i present above would represent the top of Minor A not B.

    The options for minor B above are counted by the green labels and that would be a flat. i believe most likely a double three formation though.

    your point is taken though if wave B is to be counted as an expanding triangle but that was not my intention on the above.

  3. i'm at CiL 22:29 et tried twice again, posts not shown.

  4. CiL 22:11

    i see maybe a producer put my comments on hold, not published.
    i don't think i do anything wrong.
    oh, well!!!

  5. Humble. i'm not seeing ur comments for posting and so that i can give u aa. try posting something again.

  6. i've been trying last 2~3 hours. close, re-open CiL. even reboot the computer. no success at all.
    am i on the prohibited list CiL somewhere somebody marked? i got pm & public messages several time last 2 days from a producer, complaining me talk too much... but all i talked were technical analysis. that person even specifically publicly ask e-wavers to stop. i don't know what's going on. oh, well!!!

  7. anyway, do you see the expanding diagonal i mentioned a possibility for your B-wave?

  8. Humble. i think there may be some issues with the CiL. i think Col may be having issues too!!

    as for the expanding triangle for B, yes that is certainly a good option to be watching for. Blankfiend from mentions this count, which i think is a real good possibility since i'm looking for range bound action within my rectangle pattern.

  9. Grand,
    thanks for the help! i will try CiL again in the morning.

    i retreat my earlier comments about the orange 1-2-3-4-5 can't be an expanding diagonal.
    it can still be an expanding diagonal. i know here 3 is slightly larger than 5. but where does EWP say that is a violation? on EWP, it only shows a "real life" example of a past ONE chart, nothing else said. no mention of the the size of 3 and 5 either. do you see any guidance about expanding diagonal anywhere? if so, i would like to see.

    i have some latest "real life" examples related what happened right now! hopefully i can explain in the morning at CiL. i think that should be convincing!

  10. Humble. I suggest you view pages 86-91 of EWP (10th Ed). in my opinion this is the most important section of the book if u r going to count waves based on EWP. This is where you will find the rules and guidelines for all the EW patterns.

    under rules for diagonals on page 88, " In the expanding variety, wave 3 is always longer than wave 1, wave 4 is always longer than wave 2, and wave 5 is always longer than wave 3."

    that is why i show the larger expanding diagonal option above as a possibility if this were to turn out to be an expanding diagonal. based on my version of this count, 5 is yet to come and that would require a new high.


  11. Grand,
    Thank you. you are right, page 88 says 5 is always longer than 3.
    i will think about this case.

    humble STUDENT!