Saturday, May 31, 2014

The Trend Continues

The market continued higher the last few days, but this does not change the wave count options expressed last time.  The best options are ending diagonal wave counts beginning in 2013 at [4] or B where their 5th waves are underway, or an ending diagonal underway since (2) where its 3rd wave is underway.  An impulse wave higher since [4] and/or (2) are very weak options.
Somewhat better is one of the sideways options starting at (1) or (3), but these are both adding a large new degree of complexity and size that does not work well in the the larger context.  For example a sideways wave underway since (3) is just expanding the size of a double zigzag higher since (2) which will lead to problems.  When the 'c' wave of the sideways correction comes, wedging has a good chance of being lost when considering that at least B will be reached.  This will invalidate all existing ending diagonal possibilities.  A large sideways wave since (1) or ending diagonal beginning at (2) with its 1st wave underway would become the best options, but the complexity of these patterns is certainly unusual.
A simpler sideways pattern since (1) is better with its 'b' nearly complete, but the size of 'b' is quite large in relation to 'a' and the whole pattern's pairing with either [D]-[E], B of (1), etc. also makes it questionable.  The 2nd and 4th waves of an impulse are typically of similar size and the corrections of the subwaves of impulses are usually of smaller size than the parent wave's corrective waves.  Also remember that an ending diagonal's 2nd and 4th waves are almost never sideways patterns so a sideways wave since (1) is probably a corrective wave within an impulse.

There are two good options following the wave (4) low; a single zigzag where an impulse wave higher needs to complete beginning at X or a double zigzag illustrated above with the colored labelings.  As discussed last time, the problem with the single zigzag is the structure of [a] of W to [w]; in order to find a corrective wave from [a] to X (clearly the most natural way of looking at the waves because of the large advance above (b) of [y]), a single zigzag must be forced from [a] to [w].  Remember a double zigzag higher from [w] to (b) for a 'b' wave of a flat is possible and this allows a triple zigzag from [a] to [w], a good way of describing that region, but this double zigzag is a poor option because of its subwave structure.
The double zigzag option higher in color resolves the subwave problem except [c] of W looks quite small in relation to [a].  But [b] of Y from a few weeks ago has good proportionality with [b] of W which makes this wave count a good one.  Relative to the other possibilities, in its entirety it is no worse.
A sideways correction still underway since (b) of [y] is possible, but the rise well above (b) gives it a low probability of occurring.

In the short-term, the core of the impulse wave higher since [b] is very likely on the 27th.  As it stands now, there is a nice shape to the wave with the core acting as a symmetrical point as it usually does.  Wave v of (iii) is a bit small in relation to i of (iii), but wave iv is much larger than any corrective within iii.  This attribute gives the strongest wave count as shown above in color but because of the better symmetry that it brings, it is the next best option.  In addition, the large subdivision we are seeing since (iv) (corrective waves as large as anything since [b]) is most typical of the terminating 5th waves of impulses, not 5th of 3rd waves of impulses.  If there is an impulse wave from ii to (iii), then there also must be an impulse wave from (ii) to iii of (v) or what will be v of (v) (wave i of (iii) really cannot be broken down into separate 1st and 2nd waves because of the small size of the waves within it).  An impulse to iii requires a very wide corrective wave from (iii) to ii which is large in relation to ii of (iii).  So that option makes little sense.  Better is an impulse to what will be v of (v), but as mentioned a 5th of 3rd wave with subdivision like this not typical.

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