Above are three identical charts, each showing a different Elliot Wave interpretation, "count."
The first count is impossible because, according to the rigid rules of Elliott Wave, wave-4 cannot overlap wave-1. The count is deceptive because for anyone bullish, the corrective waves 2 and 4 are pretty similar in nature.
Given that the first chart can be ruled out, we are left with two possibilities. The most likely is chart two, in which the bull market from 2009 to 2011 was a counter trend, a-b-c, that is part of a larger bear market than began in 2007.
The only valid count that is bullish is the third chart, in which this current correction, not being a wave-4, can overlap wave-1. This is possible by classifying this correction as sub-wave-ii of wave-3 (of a five wave advance.)
I don't necessarily believe in Elliott Wave, but this post is my best assessment--which I am very confidence is accurate--of the market according to the theory's principles.
Good work. Chances are, we are in # 2. However, straight down is not the only kind of Wave C. Wave C can be a flat - No? 1370 -1020- 1250-1020,... etc.
ReplyDeleteIn a "flat" correction, wave C would end at 666, the same level that wave A ended. A "zig-zag" would put C below 666.
ReplyDeleteImo the probable count is unlikely (i.e if those lows are retested they will not hold,same for 2007-8 highs): that kind of strong bottoming/top formation is not made for "retest" -IMO
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Anon :)
The "probable count" is a bear market to or lower than 2009 lows. I depitcted the idea, not details.
ReplyDeleteThanks for the clarification George!! :)
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