The deep correction from 132.78 indicates, that wave iii of 5 ended early and that wave iv of 5 is ongoing. Wave iv of 5 could already have ended at 131.18, which a break above 131.91 will confirm. However, until we have a clear break above 131.91 we must accept, that wave iv could retrace a little more of wave iii, with a deeper correction down to 130.88 and maybe 130.43 (not likely), before wave v of 5 takes over. As wave iii ended a little early (below our ideal target at 133.59) we should expect wave v to end a little lower too. Wave v should as a minimum reach 133.20, but it is more likely, that we will see a top at 134.47.
The deep correction has forced me to change my count. Instead of a series of waves one's and two's the rally from 1.5261 has been a leading diagonal. This type of impulsive, is the only one that allows overlapping waves and still is impulsive. That means, that we currently are in red wave ii, which we expect will terminate in the 1.5466 - 1.5532 area, from where the powerful red wave iii is expected. Short term we will be looking for a move higher towards the 1.5667 - 1.5696 area from where we expect one more decline down to the 1.5466 - 1.5532 area, with 1.5466 as the most likely target, before red wave iii takes over.
Hi EWS:
ReplyDeleteI was reading FWTFF, as you remember is one of ours favourites books on Elliott Wave Analisys. Reading about Diagonal Triangles, the book remembers us that if we have a Diagonal Triangle as Wave 4, the next movement, or wave 5, will be extended.
In EURJPY, that posibility happened, I mean the last wave 4 that began at 131.111 or the final point of wave 3, and ended at 128.978, or "e". The complete movement was a Diagonal Triangle.
Do must we wait an extended wave 5?
Hi Manuel,
ReplyDeleteI guess, when you say wave 4 here you mean wave iv of 5 right?
Wave iv of 5 was a triangle, but not a diagonal triangle and therefore you can't expect and extension in wave 5.
Trying to figure out where wave v of 5 is likely to terminate. We should first take the distance traveled by wave 1 and add that distance to the bottom of wave 4, which will give you a target at 128.33, as we have surpassed that target we do the next calculations, which are taking the distance from the bottom of wave 1 to the top of wave 3 and calculating 38.2%; 50.0% and 61.8% of that distance and adding it to the bottom of wave 4. That would give you 131.42 (38.2%); 135.38 (50%) and 139.34 (61.8%).
When you have wave i to iv of wave 5 you do the same calculations as you just did of the larger waves. When doing that you should get the following targets 132.17 (38.2% of wave i through wave iii of 5); 133.64 (50%) and finally 135.10 (61.8%).
Now you can do the same calculation when/if you break down wave v of 5, which will give you the following targets 133.22 (38.2%); 133.85 (50%) and 134.47 (61.8%).
That done you have a cluster of target near 135.00 so we should expect this target to draw prices to itself. and as I have 134.47 as the lowest target I would use that as the point where I would exit my long positions and sell or wait for the slightest confirmation that a top might be in place.
I hope the above make sense to you, otherwise just give me a hint and I will do my utmost to explaine it.
Kind regards
EWS
Hi EWS:
ReplyDeleteThat's makes sense to me.
When I talked about wave 4, I'm meaning wave iv of 5.
Otherwise, all 5 movement, or price action from 25/02/2013 up to date is a Ending Diagonal Triangle
Regards
MCC
Hi EWS,
ReplyDeleteDo you think we wave a wave 3 top here on SPWR?
Can you do a 60 min chart on it? If it takes too long, then please skip it.
Thanks,
Todd
Never mind EWS,
ReplyDeleteI guess I am more interested in your thoughts if you think we could pullback here to the top of the trendline breakout around 18ish.