Wednesday, July 15, 2009

YTD 1d Chart

There has been a triple zigzag proposed for some time now. It calls for a triangle (X) wave and a double zigzag (XX) wave that may have bottomed on the 8th of July. The fact that the (X) wave did not correct anything bothers me; its E wave wave finished higher than the previous wave 5 peak, the [v] of C of (W) wave. Also the triple zigzag is a rare pattern; why is it even being used if there are other valid counts? The market action looks more like one leg up with a correction.

This count and the alternative count shown (counts that Kenny has mentioned in the past) have issues of their own but may be the best out there. [iv] corrected [iii] of C deeply and nearly overlapped wave [i] but C does fit a trendline. Also the [ii] correction did not retrace the the leading diagonal [i] wave deeply as is typical (it is also a strange looking correction but that would be the case for any of the three mentioned counts).

With these counts there are varying expectations. If a triple zigzag is forming there will be a (Z) wave comprised of two zigzags (5-3-5) remaining. A double zigzag pattern as in the above chart would lead to a (Y) wave that would again be two zigzags. Finally if the alternate count shown in the chart is valid, there will be one more 5-wave advance (wave 5), a correction of some kind, then another 5-wave advance.

Note that the above (X) wave may not be complete, it may really be a triangle or a flat forming with other alternatives having been discussed in previous posts. So if new highs are made and prices come back down into the 800s, it may be tricky to determine which of the above three counts are correct if the wave formation is not obvious.

Thanks again for your great ideas Kenny!

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