Wednesday, December 15, 2010
Trend is down
Since topping around 1.35 price has declined in a corrective way. It looks as if this is only a first part of a bigger correction. The previous WXY rally should be a wave A of B, since price immediatly following the top is corrective. This puts us in wave B of B now. How long this wave will take is unknown and we'll have to wait to see how the waves roll out.
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Jeremy,
ReplyDeleteI am left with the feeling that wave Y was a bit too short and wonder if the fall from 1.3498 to 1.3294 could be also seen as a wave X within Y, so that another leg up would take Y to a new high in the area of 1.3615-1.3635.
I like your scenario but just for the sake of an alternative.
The closing of the current candle on the 4h chart will help in choosing between the two.
I really like your perspectives and thank you for sharing.
Catalin
Hi Catalin,
ReplyDeleteYes you are correct, that is still a possibility especially since 61.8% is a bit short for a wave Y. Price will have to start to rally soon and break 1.35 though. Could be hard with the doji (resisting 1.35) on the daily chart. We'll see, but this is certainly a good alternative count, good job!
Jeremy
Jeremy,
ReplyDeleteThe 4 h candlestick does not really say much as the gravestone doji is not of a real meaning unless it comes at a top or bottom. You are right that the daily candlestick will tell us more. If the body of today's candle will not close in a bullish stance, then the 1.35 will most probably stay as resistance.
If price stays above 1.3314 for the next couple of hours we might see a small triangle now as the wave b of b.
Have a nice evening!
Catalin
a flat going on?
ReplyDeletethere is divergence between price and RSI with a previous low at 1.3289
probably wave b finished at 1.3377
ReplyDeleteanother scenario would be that wave a is made of an w-x-y as a combination of a double three
ReplyDeleteapart from the structure, the down limit will tell us if it comes under any ratio with the leg from 1.3499 to 1.3285
we shall see!
Catalin
could we be wrong and have a 3rd wave now going on?
ReplyDeleteUSDJPY is bullish, S&P makes a leg down ... the dollar index just made it through 80.06
Otherwise I agree with you that the first leg down from 1.3499 has a rather corrective structure and it should not be possible to have a 3rd wave down
I hope that I do not make your life a misery now with all these speculations.
Catalin
Hey Catalin,
ReplyDeleteI don't know about that 3rd wave, i assume you mean a 3th of a wave 3, with 1.4280 as a starting point? To me price from 1.35 looks too much corrective for this to be a 3 of 3. But we have to consider it anyway just in case. The last 3 daily candles show a bearish pattern, this could just be there for the wave A though. We'll have to wait a couple of days to be sure.
Don't worry about asking too many questions and showing me your alternative counts, i really don't mind at all. I enjoy reactions to my posts.
Jeremy