Wave Principle: 2/1/11 EOD Update [3:50 PM Golden Section Update]

Tuesday, February 1, 2011

2/1/11 EOD Update [3:50 PM Golden Section Update]

[3:50 PM Golden Section Update]

Using the principles of the Golden Section and how it applies to an impulse wave, we may be able to project for wave 5, once a wave 4 low is established. I will adjust the Fibs once I am comfortable wave 4 is in to project for wave 5 using this technique.

For now, I will assume wave 4 retraces to 1300, the wave 4 low of the previous trend, which is also approximately the 38% retracement of wave 3.

EOD Update

A fourth failed head and shoulders pattern. Bears have failed to take control once again.

Needless to say the April top comparison, as promising as it was for the bears, did not play out.

I still don't understand why folks continue to try to find the top? I have no bear count option, not until a five wave structure down is put in.

Here is my primary count cleaned up with just one option now finally. The wave 4 count panned out perfectly and the squiggles I presented arguing that the last downdraft was part of a larger corrective paid off.

I have the market working out a fifth wave (still open for interpretation as to a fifth of what?). The degrees on the chart for the blue labels may have to change if this is only the first five wave set of five to come.

Notice the fib targets for wave 5 to 1 ratio? Both are relevant levels so we'll just have to see what the structure looks like as it approaches those levels.

I believe a wave 4 is in store here so we'll have to see how the next day or two plays out. It is likely that the market may only go sideways over the next day or two.

Here's a 3 min view of the internals for the main count. A possible target for wave 4 is somewhere near 1300 or as low as 1291. We'll just have to keep an eye on the structure as it develops.