Thursday, January 13, 2011

1/13/11 - [4:39 PM Update]

[4:39 PM Update]

Wave 5 Extension Scenario

Daneric mentions a scenario where upon wave 5 may extend. He comes up with a target of 1302.

I figure we should explore this option by applying what we know about wave structure and the Golden Mean using Fibonacci math.

According to EWP, "Wave 4 often divides the price range of an impulse wave into the Golden Section. In such cases, the latter portion is .382 of the total distance when wave 5 is not extended and .618 when it is." See the figure below

Golden Section with Wave 5 Extension

I previously wrote about this concept here.

[3:40 PM Update]

5 Min

This chart is an internal count for Option 1 below. Waves 2 and 4 appear to alternate well and a 2-4 channel projects 5 completing at the mid channel if it = 1 near 1290.

EOD Update

Bounce right at the 20 SMA on the hourly.

Option 1

This continues to be a valid count, granted with some adjustments as I'm trying to sort out the waves 3s and 4s.

I believe we saw the conclusion of a complex corrective flat for wave 4 right before the close.

Tri Option

This option is also still on the table. Instead of a wave 4 pullback as option 1 highlights, this may have been a wave 2 of 5 pullback.


A possible ED for INDU?


Here's a start to a potential bear count. We'll have to keep our eyes on this one. It's not far from invalidating itself though, so we'll see tomorrow.
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