The roach into the close left us right on the channel bottom I drew earlier today. I'd like to see us pop a few points in the morning before rolling over to close at the 1388-1390 area to complete 4.
Yes, the W4 overlaps slightly with the W1 up to 1391. The overall structure is one of those expanding ascending wedges that often mark tops, where 1/4 overlap is allowed as a sign of overall weakness. A final fifth wave to 1440 reaches several levels of serious resistance.
I count the 2008 crash as [A] in 3 waves, a 5-wave A, the B-wave back to 1440, and the epic crash to 666 in a 5-wave C. The current B wave we are in now would reach that B of [A] top at 1440 before heading south again. We would also put a pin through the top Bollinger band on the weekly, something done at the tops in 2000 and 2007 (and several other important turns).
After tomorrow, the story will return to expectations of QE into an official FOMC meeting, so the market will trend upward again, on hold, until it's official September 12.
Looking forward to a good walk around Ballard this weekend, photo-blogging the latest RE atrocities.
I'll also work on a "slow-collapse" model this weekend, which has a similar wave count and price targets as the fast one, but dragging out well into 2013. The support lines on the chart suggest that "C-down" could be an epic struggle of bears super-eager to short a collapse, against the financial elites and monetary authorities determined to keep the plates spinning at all costs. So I'll chart that up and float it here.
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| Market top or nasty bear trap? |
1 comment:
Look at the EUR go!
If /ES does not retreat, we gap over this little down channel for 4, mark 4 complete yesterday, and note that the bear trap was the sell-off into the Thursday close.
Today would start the last leg to 1440.
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