Friday, June 6, 2014

To the Moon!

The discussion of the longer term options, in 600+ words, is omitted here but can be found at  The final analysis usually not available on this blog has been provided however.  Also find the viewpoints of two other analysts and a consensus view while enjoying a 1-week free trial.  You can cancel your subscription at any time.

The wave higher beginning at (4) is growing in size where the wave higher following B is pulling away and larger than A.  Going back to the impulsive option since (4), although the size of C in relation to A is meaningful, keep in mind that a 2nd wave from A to B as the sideways zigzag+flat pattern illustrates above is not unusual, but not the most typical.
The double zigzag possibilities since (4) are not strong options because of the complexity that they command.  The double zigzag underway where 'w' is to (b) of [y] of B becomes weak from not strong due to its size requirements and the fact that a sideways pattern since (3) is really the only place it can fit; a double zigzag from (2) is no longer possible and 1975.65 would likely be taken out invalidating the ending diagonal option since (2).  The other double zigzag possibility is weak when considering the complexity and the fact that the subdivision within C is as large as that of 'b' of 'w'.  It also does not fit well into the smaller waves that follow B.

The pause that occurred early this week and ensuing rally works naturally into an impulsive structure.  Last time using the price action from B, it was found that the 3rd wave of an advance that began at B very likely terminated at [iii] or b of (w).  Using this we can say that the 4th wave terminated at [iv] or b of (x).  The double flat structure as illustrated above is more complex than a single flat to b of (x), but it makes [iv] of best size in relation to [ii].  It also has the advantage of giving a more simplified structure of the impulse rally following where no waves are required to be subdividing and there are likely not going to be any subdivided waves.  An impulse beginning at b of (x) on the other hand must have at least one subdividing wave and the corrective wave (y) is a bit large in relation to (ii).  But it does allow (i) to be a 3rd wave which is the most typical position because it is the largest wave.  If this is the correct wave count, there is likely a 5th wave underway since (ii) that is an extended wave.  Obviously if an impulse higher from [iv] is the true wave count, the somewhat preferred option, wave (iii) must remain longer than (v) so it does not become the shortest wave.
Final analysis:
The discussion above leads us to conclude that the market is winding down waves on a variety of scales.  An impulse wave higher from B is likely nearing completion where we are only waiting for [v] to continue winding down.  On Wednesday it was correctly stated, "there can even be a pop higher where an impulse from today's low has not yet shown its core.  But Regardless of what happens, it is likely that the 4th wave of an impulse higher from B is underway or complete where [iii] or the 6/2 high marked the termination of the 3rd wave.".  Trading-wise, it was mentioned that there is "a speculative short-and-hold play for some with a risk appetite.  But it is important to recognize that the short-term is uncertain".  The same remains true now, but there is less risk attached to the trade.  There will only be confirmation of a complete impulse wave since B when we see a corrective wave of larger size than any corrective wave higher since B.  This confirmation is then only a "signal" on the larger website that needs conformation to change the view on the front member's page.
Since it is unlikely at best that an impulse is underway since (4) and a double zigzag higher underway from (4) is not that likely, the impulse underway from B should terminate the rally beginning at (4) and this should happen sooner than later.
In the longer-term, weeks to months, the picture remains bearish.  The reason is that there are only mediocre to poor bullish wave counts that allows for higher prices after an impulse wave since B and a zigzag-family pattern since (4).
The wave higher since 2009 remains uncertain and works well as both an impulse or single zigzag wave.
very short-term (hours): bullish
short-term (hours to days): neutral to bearish
medium-term (weeks): bearish
long-term (months to a year): bearish
very long-term (years-decade): neutral

Finally, if anyone is in the Minneapolis, MN, USA area on Thursday, you can come hear me give a free guest lecture for an hour at the local TCTG (Twin Cities Trading Group) Group.  The last speaker for this group was Ralph Acampora.

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