Jan 13, 2018
EW pattern some thoughts
I have problems with the daily EW pattern for a long time, it is obvious that is some kind of a third wave but that is all. Looking at other guys which are better than me... their counts are not convincing either. We have very shallow pullbacks for a long time(since Nov.2016) which makes difficult to find the pattern and opens the door for a lot of speculation when you try to use EW.
Different indexes have different looking pattern and I have played a little bit with the charts comparing them and here is what has come out.
DJT looks different compared to SPX / DJI, but I think it's pattern looks easy to count without a lot of contradictions.
DJTA weekly.... I can not see what could be wrong with this count. Btw XLF has similar pattern with missing 4 and 5 of V.
Than we have NYSE. It is very similar to SPX / DJI with one important difference the Oct-Nov.2017 correction which diverge from the major indexes barely noticeable on their charts, but seems to be important. This drives me nuts for a long time:)
Looking at the chart we have wave up Aug-Oct.2017(1 yellow) correction(2 yellow) and acceleration most likely third wave(3 yellow). Now how to fit this in the bigger picture?. We have weak wave April-Aug.2017(see the angle of ascend) probably a fifth wave(5/III) where does this fifth wave fits if you start to count from 2016 low? It fist like the top of wave III. So the move up from the Aug.2017 low should be 1-2-3 from wave V.
And you end up with the same count like DJTA. If you look at the RSI and draw trend lines you will see that it follows every wave even the internal waves without breaking the trend lines so the start and end of the waves on the chart are right.
SPX / DJI and NYSE have very similar charts. If you compare them there is hardly any difference(except Nov.2017 which could be very important clue) and I think they all have the same EW count. So applying it to SPX it looks like this on the chart below.
We will know soon if this is right or wrong, but I think this count is better than any other I have seen. Cycles are ok with it.... what could go wrong - this is the top of wave III and not V. We will know this when we see the 18 month cycle low in the summer(expected in late June or July at the moment).
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Are you bullish or bear in gold in the next 30 days? Thanks Krasi
ReplyDeleteCorrection should begin soon... I do not now for how long probably two weeks then higher again.
DeleteKrasi, u have already done a good job. No one knows anyway, till it happens. My 2cent worth view is that magnitude and duration for first degree did not match with those in current wave. I think we are still in wave III, not even III-4 and III--5. also, if you look at the major tops, they lied on the fib resistance level, like 2250, 2400, 2500, I.e, magnitude of first leg x fib ratio. next stop is 2830, we have just passed 2738, I.e. 3.618x of first leg. 2830 may also be top of wave III.
ReplyDeletethanks. H
Yes I know, the pullbacks are so shallow that counting 4 of III or IV looks ridiculous - magnitude and duration do not fit.... and a lot of room for interpretation. Only in hindsight we will know the right pattern. The probabilities range from very bullish iii of III to very bearish "THE TOP"... the EW hatters are laughing now:)
DeleteThis 2830 shows as a top on my chart above too:) The decline in February/March for the 20 week cycle low will be interesting. It's magnitude should bring more clarity.
It makes sense in the new post I have a chart with 4 and 5 of III. Interesting is even in this case until the 18 month cycle low in June/July both scenarios should follow the same path. The difference will be if we have a corrective or impulsive wave into the low.
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