Thursday, September 1, 2011

6:04 PM EOD Update

6:04 PM EOD Update

Here's another look at today's wave structure using TOS. I like the channeling tool on this platform more since it is more accurate than placing them manually on Strategy Desk.

From the 1230.71 high, we clearly have a three wave structure down, which I have labeled wave a (not in the chart above but the one below) and a clear three wave structure up, which I have labeled wave b and nearly a textbook flat setup due to the 90% retracement of wave a.

Using the EW channeling technique, I have drawn this channel connecting waves 2 and 4 with the lower channel set off wave 3. There are five fairly clean waves down and the fifth certainly looks like it is completing an Ending diagonal. I also like how it terminates right at the mid-channel, which often times it does when using the channeling technique to project for wave 5.

Typically in flats, wave c, which should be a five wave structure, extends slightly beyond wave a. In this case it has extended just over 110%.

So as far as I am concerned, this corrective pullback has met all the requirements to call it a completed flat. So that's what we'll call it for now until the market tells us more.

Of course, 5 could extend further towards the lower end of the channel but for now, because of the wedging nature of the structure, I'm leaning towards that ending diagonal for wave 5.

I also will leave room for the possibility that I may have labeled the ED early as well. It's very possible on the first three waves of the ED have completed.

The 1194 level shouldn't be ignored though either since it represents the 38% retracement of wave 3 and pretty much the head and shoulders target I presented in the chat room earlier today.

1:24 PM EOD Update

60 Min

Here's something else I'm looking at that may imply a wave x bounce tomorrow before another leg lower for wave y. Since we would expect (but not required) 4 to travel across to the lower channel and the fact that the hourly MACD is heading towards it's TL support, I believe this is what may happen.

1:02 PM EOD Update

30 Min

This is the primary count. I believe an a-b-c flat correction for wave 4 blue completed today. Wave c was just over 110% of wave a. As far as channeling targets are concerned, the wave structure may have fallen short.

Notice that wave 2 wave fairly sharp so we may have to expect that wave 4 turn into a complex double. If this is the case, I believe we should see a wave X bounce tomorrow if 4 is not complete.

However, if wave 4 blue is complete, wave 5 should begin tomorrow.

I don't really like the red and green alternate counts so much anymore but they are still valid so we must be prepared should the market take a different direction from the blue primary.

See below for the squiggle count of the falling wedge.

3 Min

An anatomy of the falling wedge.

I'll look and possibly post more charts later. Gotta run!

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