Perfect Wave - 2012-1/2
- Thread starter snowrider
- Start date
snowrider,
I am discussing the current waves with trader collegue regarding the S&P, and we have come to the following conclusion that Wave 5 of Wave 3 has completed, and the S&P is currently in Wave 4. I've also read and heard that Wave 4 of the larger pattern already occurred, however our analysis is there has not been any significant pullback to justify a completed Wave 4.
Our wave counts of the larger pattern (weekly chart):
Wave 1 from 1,075 to 1,293
Wave 2 from 1,293 to 1,159
Wave 3 from 1,159 to 1,422
Wave 4 will result in a choppy "A-B-C" pattern, perhaps stalling around 1,320 (38.2% fib of Wave 3), although holding well above the top of Wave 1 at 1,293.
Then a rebound Wave 5 pattern which will break the top of Wave 3 of 1,422, hence completing the 5 wave pattern that began on October.
A larger correction (perhaps 50%) of the completed 5 wave pattern will create the next big buying oppourtunity.
Please provide feedback/comments to this analysis, thanks.
I am discussing the current waves with trader collegue regarding the S&P, and we have come to the following conclusion that Wave 5 of Wave 3 has completed, and the S&P is currently in Wave 4. I've also read and heard that Wave 4 of the larger pattern already occurred, however our analysis is there has not been any significant pullback to justify a completed Wave 4.
Our wave counts of the larger pattern (weekly chart):
Wave 1 from 1,075 to 1,293
Wave 2 from 1,293 to 1,159
Wave 3 from 1,159 to 1,422
Wave 4 will result in a choppy "A-B-C" pattern, perhaps stalling around 1,320 (38.2% fib of Wave 3), although holding well above the top of Wave 1 at 1,293.
Then a rebound Wave 5 pattern which will break the top of Wave 3 of 1,422, hence completing the 5 wave pattern that began on October.
A larger correction (perhaps 50%) of the completed 5 wave pattern will create the next big buying oppourtunity.
Please provide feedback/comments to this analysis, thanks.
ScalperJoe- Thanks for sharing your thought. That scenario is a good and valid one. Please see attached wave count. Your wave count is labeled there as [A][C][D][E] in green line alternative count. Currently my preferred count is that a wave-[] (which is your wave-3) has ended, and a big collapse all the way to 960 area in the end of this year is underway. I will pay very close attention if SP ever goes to 1320 area to see if it has any sign of bottoming there. The 1320 area will be the cross road between a real collapse or a final leg up.
busted - Thanks for commenting. Yes, I agree with you (kind of) that EW "is very complicated". But I would like to say that it is very easy to use in trading (because EW has some rules for validating a wave). About your question if "we are still in the wave 4 from peak of 2000", that is what my assumption for labelling 667 (2009) as [[[C]]] is based on. With that assumption, the "wave 4" is in the formation of a huge triangle. About QE3, I don't care, and I never care any FA stuff.
Got it, thanks. However, I'm curious as to how you get the 960 target, and what is the scenario for it to occur this year?
If it breaks 1,320 then perhaps it goes flatline to around 1,250-1,290 range during mid-summer (near mid-point of 5 wave pattern which began last October), before closing out in the black for 2012.
Without some climactic event (war, lack of additional QE, hyperinflation, Euro/dollar collapse, etc), I'm not sure the market is poised break the prior two years of intrayear lows and to fall to 960. I'm not suggesting it won't retrace on the larger wave count eventually, just not by the end of this year.
Your thoughts, comments?
ScalperJoe - Thanks for nice commenting. About the 960 area target, it is just at a 0.382 fib ratio from 2009-03 lo to the recent hi. I would like to take back what I mentioned last time about the timing of the end of this year. I mentioned that because I wanted to load something for next year by the end of this year. The actual timing could be 2013-09 to see the big cycle low. When the time is there, and when the price is at a fib ratio (say, 0.5 at 1045), that will be an excellent opportunity to load.