Above is a close up of the rising wedge as well as a count for this leg of the correction. The green area was my initial target and the red area would have been the theoretically perfect target according to the channel in the larger view below. Could it be a double top? Maybe...but C might extend to the 77.3 red area. Will it get much higher than that...EXTREMELY doubtful.
Above is a bigger picture view of what is transpiring. We are very near the top of wave 4. Note I said top of wave 4 and not the end of wave 4. As corrections go, its possible to bounce up and down for awhile before actual wave 5 down begins. But I don't think that will happen as wave 4's tend to be the opposites of wave 2's. This wave 2 was a controlled up and down flat. This wave 4 has been a violent spike up and I expect it to tend that way. In non-ew terms, I am simply looking for a retest of the large falling wedge's upper trendline, before the coming rally. Also note the negative divergence on the hourly chart for the stochs.
Above is the reading from www.sentimentrader.com. This is a contrarian indicator. Note that short term it is excessively optimistic, which means we are going to drop hard soon. Longer term, there is pessimism, which means longer term we will rise :) This actually fits exactly into the EW forecast of a bull market after this coming low.
5 comments:
Excellent stuff!
love it brother, well done. don't really have much to add other than i still need data that C is done vs us just ending a long A of the 4 of (5) with B and C to come
Thats true Johnny, my thoughts that C ended are just speculation. It is VERY possible that this pull back coming up is just B.
If that is the case, then I expect ABC to be flat and for C not to extend too much further than it is now (not beyond 77.3). But since it hit the target region so quickly and its well within my channel, I suspect it might actually be over soon.
The indicator on SentimentTrader doesn't show as excessive optimism as the indicator on the pic on your blog. Has the optimism changed since you posted the pic?
JReality,
I just checked it the same.
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