Wednesday, January 5, 2011
A deeper X
Price fell sharply today, but seems to find some support now. All of the price action looks corrective to me. The last part of the decline is the hardest to count, but the overall pattern looks like a double three correction, a WXY. This puts us in wave Y where the first 2 parts should be finished and the 3th and last part of this Y should start soon. This rally will go above 1.3497. As an alternative i still keep the triangle in mind, but that would require some small adjustments to the count.
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Jeremy,
ReplyDeleteYou might be right playing the scenario of a deeper X as part of a WXY, as opposed to a triangle.
At a first sight the triangle looks obvious and everybody around on forums talk about the triangle in EURUSD. I have learned the hard way that when something looks too obvious, one shall expect the unexpected.
As per your input given few posts ago, the structure of the move is more important than the appearance.
Once the down move is finished, we shall review once again the internal structure of this last leg down.
Thanks for your input and previous answer.
Regards,
Catalin
Another reason for which I also favor the scenario of a larger WXY to that of a triangle is the structure and length of the X wave (the first and large one on your chart). This should take the place of a wave B within the triangle. But is the wave C of a triangle which is usually more complex (like double or triple zig-zags), whereas the others are more evident 3 wave moves.
ReplyDeleteYour feed-back on the above would be highly appreciated and considered a learning.
Regards,
Catalin
Catalin,
ReplyDeleteA general guildeline for triangles is that most of the time there's 1 (and only 1) complex wave, no matter what wave it is. Also i don't like it when price goes above the A-C line during the wave D, like what happened here. I don't know of any rules or guidelines that talk about that, but in my experience, this doesn't happen. It's also still possible that we are in wave C of a triangle, as long as we stay under 1.3497.
When i started out with EW, i loved triangles, but now i don't because of all the possibilities there are.
Friendly greetings,
Jeremy
Jeremy,
ReplyDeleteI thank you for the input!
Still, I missed you when making reference to the wave D going through the A-C line. Is it about the small triangle which is figured out on the above chart?
Regards,
Catalin
Sorry! In the mean time I got it with the D wave. This would be the case if we would consider the last leg down as a wave D. It is there the top that 'cuts' the A-C line.
ReplyDeleteI would dare to discount the idea that we are in a wave D, at least for the reason that triangles are continuation patterns.
I would rather vote for the scenario that we are in a wave C (as per your preference above) despite that I like the WXY scenario even more. If this is a wave C we need to accept it under the structure of a flat and still expect to touch the base line coming from 1.2970 through 1.3055.
All the best,
Catalin
Sorry again! I was dizzy and all over the place when I was arguing that we cannot be in a wave D.
ReplyDeleteThis might be a wave D without negating the continuation pattern of the triangle. My previous rationale was made neglecting that there is an E wave to follow.
I still favor the WXY scenario.
Excuse me please for all the hassle!
Best regards,
Catalin
Jeremy,
ReplyDeleteIf the last leg down is a C wave as part of X or a C wave as part of a D wave, another leg down as the 5th of the C might be required. 5 would be equal to 1 right around 1.3059 but the 200 d MA at 1.3076 might also hold.
Can we have such a deep move and still have the WXY and the triangle scenarios?
WIshing you a good day,
Catalin
Price needs to stay above 1.3054 for this to be a valid wave D of a triangle. It can go lower in a wave X but it is not something you want to see since the risk of a breakout to much lower prices would greatly increases.
ReplyDeleteJeremy,
ReplyDeleteWhat seems a bit strange is the structure of the forming flat as the 161.8% comes around 1.31511, while the price went down to 1.3090 (still going down).
Is this something that might help in qualifying the leg down as an X wave or it still keeps the structure of an extended flat as wave D within the triangle?
Regards,
Catalin