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Catflap's Cycle Views - A Rally into Q3. 2010

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Tim Wood maybe? ;) (boom boom!) .... sorry, couldn't resist it.

 

A new bear market has NOT been confirmed by the Transports which have so far held their February lows, which means we are still in a bullish trend!

 

More here, today:

Stock Market Trend: Unchanged

TO SELL OR NOT TO SELL?

I continue to receive questions regarding Dow theory and whether or not a so-called "sell signal" has been triggered. Technically, with Dow theory there is no such thing as a buy or sell "signal." Rather, the Dow theory founding fathers anticipated trend changes and during these periods of such participation they would begin to establish their positions ahead of the anticipated trend change. They referred to these periods of anticipation as "buy and sell spots." Then, once the trend change occurred, that served as confirmation of the "buy and sell spots."

 

His Dow theory, doesn't tell you when, it merely confirms that you rightly anticipated a "Sell Spot" and it confirms you got it right, or it tells you that you have missed it.

 

I think Tim may need to go back and design a better Signal, or he is always going to find himself in the market too late.

 

This is why I like Tom Obrien's Volume-based system, and my own Moving Averages : If volume stalls as the market moves up to a key MA (as it did in mid-April), you are seeing a nice set-up at a potential "Sell Spot"

 

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His Dow theory, doesn't tell you when, it merely confirms that you rightly anticipated a "Sell Spot" and it confirms you got it right, or it tells you that you have missed it.

 

I think Tim may need to go back and design a better Signal, or he is always going to find himself in the market too late.

 

But Dow Theory is just a barometer that tells you about the state of the economy and whether the primary trend is still in force - it lags, but it wasn't meant to be a market trading tool. It's aim is to keep you on the right side of the market and so far (if you read it right and don't start adding things that aren't Dow Theory) it's saying the primary trend is unchanged.

 

S&P daily stochastics are now locked-in above 80 like late February, with price above all the key EMA's and momentum turned up. MACD is positive and RSI is above 50 - this all looks bullish for now:

 

http://stockcharts.com/h-sc/ui?s=$SPX...id=p94199359702

 

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Latest work - symmetry wise, I think it's possible the peak could come around September 10, 2010 and there's also a Bradley turn on September 11, 2010. But my original forecast is a peak somewhere between August 27, 2010 and September 3, 2010 to end the 18-month cyclical bull market from the March 9, 2009 lows.

 

*I've attempted some EW counts showing how I think it might play out - this shows we are currently in a iii of 3

 

 

 

 

 

 

 

 

 

 

* As stated on another thread, I've never used EW before and vowed to never learn/use it after seeing some of the predictions that Prechter makes and the way that people have to keep changing their counts. I've only read a little about it on-line and viewed hundreds of complicated charts which I don't really understand - I like to keep things simple (KISS - keep it simple stupid).

 

So I make no apologies if I've violated same basic EW law or made an invalid count <_<

 

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Latest work - symmetry wise, I think it's possible the peak could come around September 10, 2010 and there's also a Bradley turn on September

 

* As stated on another thread, I've never used EW before and vowed to never learn/use it after seeing some of the predictions that Prechter makes and the way that people have to keep changing their counts. I've only read a little about it on-line and viewed hundreds of complicated charts which I don't really understand - I like to keep things simple (KISS - keep it simple stupid).

 

So I make no apologies if I've violated same basic EW law or made an invalid count <_<

If we are in 3 of 3, you would/will be seeing expanding volume, and solid fundamentals behind the rise.

That's not what I see.

 

The action of SMH/Semiconductors and TLT/Bonds, are other big problems for the Bulls.

 

A 2 of 2 rally may have ended yesterday, or may end very soon, and we may see 3 of 3 unfold to the downside

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Here's EWP rules and guidelines to get you up to speed

 

--- ZigZag Rules ---

 

- A ZigZag is a three wave structure labeled A-B-C, generally moving counter to the larger trend.

 

- It is the most common three wave Elliott pattern.

 

- Zigzags are corrective in nature.

 

- Wave A must be an Impulse or a Leading Diagonal.

 

- Wave B can only be a corrective pattern.

 

- Wave B must be shorter than Wave A by price. All internal points are considered.

 

- Wave B must be at least 20% of A by price.

 

- Although there is no minimum time constraint for Wave B, it must not exceed 10 times the time taken by Wave A.

 

- Wave C must be an Impulse or an Ending Diagonal.

 

- If Wave A is a Leading Diagonal, then Wave C must not be an Ending Diagonal.

 

- Wave C must be longer than 90% of Wave B by price.

 

- Wave C must be less than 5 times Wave B by price.

 

- It is not allowable to have both Wave 5 of A a failure (Wave 5 is shorter then Wave 4) and Wave 5 of C a failure.

 

- Wave C must be no more than 10 times either Wave A or B in price or time.

 

 

----- ZigZag GuideLines -----

 

 

It is unusual for a Wave within Wave A to have a greater gross price movement than Wave A.

 

Wave B should end nowhere near beginning of Wave A.

 

Wave B should retrace at least 30% of Wave A.

 

Wave B is most likely to retrace Wave A by about 38.2%.

 

Wave B is next most likely to retrace Wave A by about 50%.

 

Wave B is next most likely to retrace Wave A by about 61.8%.

 

The largest Wave in B is usually less than the gross price movement of Wave A.

 

The time taken by Wave B is usually between 61.8% and 161.8% of the time taken by Wave A.

 

Wave C is most likely to have a similar price length to Wave A.

 

The next most likely price lengths for Wave C are 61.8% and 161% of Wave A.

 

The next most likely price length for Wave C is 61.8% of Wave A beyond the end of Wave A.

 

If Wave C is much longer than 161.8% of A, then the pattern is more probably the beginning of an Impulse than a Zigzag.

 

If Wave C is complete, and has a greater slope than Wave A, expect the Zigzag to extend to an Impulse.

 

Although Wave C should always be greater in price to Wave B, in rare cases Wave C can be up to 10% shorter than Wave B.

 

The largest Wave within C by price is usually less than the gross price movement of Wave A.

 

The time taken by Wave C is usually between 61.8% of Wave A and 161.8% of the shortest Wave of A and B.

 

 

--- Flat Rules ---

 

 

A Flat is a three wave pattern labeled A-B-C that moves generally sideways. It is corrective and counter-trend and is a very common Elliott pattern.

 

Wave A can be any corrective pattern except a Triangle.

 

Wave B can be any corrective pattern except a Triangle.

 

Wave B must retrace more than 70% of Wave A.

 

Wave B is less than twice the price movement of Wave A, including internal points of Wave B.

 

Although there is no minimum time constraint for Wave B, it must be less than 10 times Wave A.

 

Wave C must be an Impulse or Ending Diagonal.

 

Wave C must share some common price territory with Wave A.

 

Wave C must be less than twice the longest of Waves A and B, including internal points of Wave C.

 

Wave C must be less the three times the price distance of Wave A.

 

Wave C must be no more than 10 times either Waves A or B in price and time.

 

There is no minimum time constrains for Wave A.

 

 

----- Flat GuideLines -----

 

 

Wave A is usually a Zigzag family pattern.

 

Wave A is rarely an Expanding Triangle.

 

The largest Wave within Wave A is usually less than Wave A by price.

 

Wave B is usually a Zigzag family pattern.

 

Wave B is rarely a Flat.

 

Wave B is usually greater than 95% of Wave A by price.

 

Wave B is usually less than 140% of Wave A by price.

 

The largest Wave within B is usually less than Wave A by price.

 

The time taken by Wave B is generally between 61.8% and 161.8% of Wave A.

 

Wave C is rarely an Ending Diagonal.

 

Wave C is often about the same length as both Wave A and B.

 

Wave C often ends at point which is a percent of Wave A beyond end of Wave A equal to the same percentage away from the start of Wave A.

 

Wave C usually retraces a minimum of 100% of Wave B.

 

Wave C normally reaches to the end of Wave A.

 

Wave C is not often more than 140% of the longer of Wave A or B.

 

If Wave C is longer than Wave B, then Wave C is often about 61.8% of A beyond end of A.

 

If Wave C is longer than Wave B, then Wave C is often about 161.8% of Wave A from end of Wave B by price.

 

The time taken by Wave C is generally between 61.8% of Wave 1 to 161.8% of the shortest of Waves A and B.

 

--- Leading and Ending Diagonal Rules ---

 

 

(LD = Leading Diagonal, ED = Ending Diagonal)

 

 

 

A Diagonal is a common 5 Wave Impulsive pattern labeled 1-2-3-4-5 that moves with the larger trend.

 

Diagonals move within two channel lines drawn from Waves 1 to 3, and from Waves 2 to 4.

 

A Diagonal must be contracting. There exist two types of Diagonals; Leading and Ending. They have a different internal structure and are seen in different positions within the larger degree pattern.

 

Ending Diagonals are much more common than Leading Diagonals.

 

Wave 1 of a LD must be an Impulse or a LD.

 

Wave 1 of an ED must be a Zigzag family pattern.

 

Wave 2 may be any corrective pattern except a Triangle.

 

Wave 2 must be less than Wave 1 by price.

 

Wave 3 of a LD must be an Impulse.

 

Wave 3 of an ED must be a Zigzag family pattern.

 

Wave 3 must be greater than Wave 2 by price.

 

Wave 4 may be any corrective pattern.

 

Waves 2 and 4 must either overlap or be within 10% of length Wave 3 of doing so. All internal data points are considered.

 

The time taken by Wave 4 must be between 10% and 10 times the time taken by Wave 2.

 

Wave 5 of an ED must be a Zigzag family pattern.

 

Wave 5 of a LD must be an Impulse or ED.

 

If Wave 1 is a LD then Wave 5 cannot be an ED.

 

Wave 3 must not be shorter than both Waves 1 and 5.

 

Wave 5 must be at least 80% of Wave 4 by price.

 

Wave 5 is never the longest when compared with Wave 1 and Wave 3.

 

Wave 5 is always less than Wave 3 by price.

 

The intersection of the channel lines must be beyond the end of the pattern.

 

Diagonals must move within the two channel lines or be within 10% of gross movement.

 

 

----- Diagonal GuideLines -----

 

 

Wave 1 of a LD is usually an Impulse, but in rare cases may be a LD.

 

Wave 2 is usually ZigZag family pattern.

 

Generally Wave 2 is greater than 35% of Wave 1's gross price movement.

 

Wave 4 is commonly a Zigzag.

 

It is rare that at least either Waves 2 or 4 of an ED is not a Zigzag family pattern.

 

Generally Wave 4 is greater than 35% of Wave 3's gross price movement.

 

The end points of Waves 1 and 4 generally overlap.

 

Expect the time taken by Wave 4 to be between 20% and 5 times Wave 2.

 

Wave 5 is usually greater than Wave 4 by price.

 

It is typical for Wave 5 of a LD to end before reaching the channel line.

 

It is typical for Wave 5 of an ED to exceed the channel line.

 

 

--- Triangle Rules ---

 

 

(CT = Contracting Triangle, ET = Expanding Triangle)

 

 

A Triangle is a common 5 Wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature.

 

Triangles move within two channel lines drawn from Waves A to C, and from Waves B to D.

 

A Triangle is either Contracting or Expanding depending on whether the channel lines are converging or expanding. Expanding Triangles are rare.

 

Wave A of a CT is always either a Zigzag based pattern or a Flat. Wave A of an ET can only be a Zigzag based pattern.

 

Within Wave A of a CT, Wave B must be less than 105% of Wave A's price length. The same rule applies for Waves C and D of the CT.

 

Wave B must be a Zigzag based pattern.

 

Wave C of a CT can be any corrective pattern except a Triangle. Wave C of an ET must be a Zigzag based pattern.

 

Wave B of a CT must retrace Wave A by 50%.

 

For a CT, Wave C must be less than Wave B by price and Wave C must be greater than or equal to 50% of Wave B by price.

 

For an ET, Wave B must be less than Wave C by price and Wave B must be greater or equal to 50% of Wave C by price.

 

Wave D of a CT can be any corrective pattern except a Triangle. Wave D of an ET must be a Zigzag based pattern.

 

Wave B, C and D must not move more than 10% beyond the A-C & B-D channel lines (based on the length of Wave C).

 

In an ET, Wave C must be less than Wave D by price and Wave C must be more than 50% of Wave D by price.

 

In an ET, Wave A must move within the A-C channel or pass through it by no more than 10% of the length of Wave B by price.

 

In an CT, Wave D must be less than Wave C by price and Wave D must be greater than or equal to 50% of Wave C by price.

 

The intersection of the channel lines must occur beyond the end of a CT, and before the beginning of an ET.

 

The channel lines must either converge or diverge. They cannot be parallel.

 

Wave D of a CT must not end such that when retraced 25% by E, E will not reach the price territory of A.

 

Only one channel line in a CT may be horizontal. Neither channel line of an ET can be horizontal.

 

The maximum time for Wave D is 4 times Wave C.

 

Wave E of a CT can either be a CT or a Zigzag family pattern. For an ET, Wave E must be a Zigzag based pattern.

 

In an ET, Wave E must be greater than Wave D by price and Wave D must be greater or equal to 50% of Wave E by price.

 

In an ET, either Wave A or B will be the shortest Wave in the pattern.

 

In a CT, Wave E will be less than Wave D by price and Wave E will be greater than or equal to 25% of Wave D by price.

 

In a CT, either Wave A or B will be the longest Wave in the pattern.

 

In a CT, the maximum time for Wave E is 4 times Wave C.

 

Wave E must end in the price territory of A.

 

Wave E must not pass through the B-D line, or if it does, by no more than 10% of the length of Wave D.

 

The maximum number of pattern lengths into the future that the channel lines intersect is 6.

 

In CT any overlap wave have allways maximum relation as 1.272 compared for previous wave (a, b, c, d or e). If B is overlapped, then 1.272 relation comes from previous impulse.

 

 

----- Triangle GuideLines -----

 

 

Wave A is usually a zigzag family pattern.

 

Wave B is usually a zigzag family pattern.

 

Wave C is often a zigzag family pattern.

 

Wave C usually takes more time than any other Wave in the pattern.

 

Wave D is usually a zigzag family pattern.

 

Waves B, C and D rarely move outside the B-D line.

 

Waves A, B, C and E rarely move outside the A-C line.

 

Wave E is usually a zigzag family pattern or the same type of Triangle as the larger pattern.

 

Usually at least two Waves travelling in the same direction will relate by about 61.8%.

 

It is common for two or more adjacent Waves will be related by 61.8%.

 

In a CT, Wave E normally retraces Wave D by about 70%.

 

 

 

---Double and Triple ZigZag Rules---

 

 

Double (DZ) and Triple (TZ) Zigzags are similar to Zigzags, and are typically two or three Zigzag patterns strung together with a joining Wave called an “x” Wave, and are corrective in nature.

 

Doubles are not common, and Triples are rare.

 

Zigzags, Double Zigzags and Triple Zigzags are also known as Zigzag family patterns, or 'sharp' patterns.

 

Double Zigzags are labeled w-x-y, while Triple Zigzags are labeled w-x-y-xx-z.

 

Both these patterns are included in the list of rules and guidelines below. Only a Double Zigzag is illustrated below.

 

Wave W must be a Zigzag.

 

Wave C of W cannot be a failure.

 

Wave X can be any corrective pattern except an ET.

 

Wave X must be smaller than Wave W by price.

 

Wave X must retrace at least 20% of W by price.

 

The gross price movement of Wave X must be less then 3 times the price movement of Wave W.

 

Wave X must be no more than 5 times Wave W by time.

 

Wave Y must be a Zigzag.

 

Wave Y must be greater than or equal to Wave X by price.

 

Back to back and double failures are not allowed.

 

Wave Y must be greater than 90% of Wave W by price, and Wave Y must be less than 5 times Wave W by price.

 

Wave Y must be no more than a factor of 5 times either Wave X or W in price or time.

 

Wave C of Y cannot be a failure.

 

Wave XX can be any corrective pattern except an ET.

 

Wave XX must be smaller than Wave Y by price.

 

Wave XX must retrace at least 20% of Y.

 

The gross price movement of Wave XX must be less than 3 times the gross movement of Wave W.

 

Wave Z must be a Zigzag.

 

Wave Z must be greater than or equal to Wave XX by price.

 

Wave Z must be less than 5 times Wave Y by price, and must also be less than 5 times Wave W by price.

 

Wave Z must be no more than a 5 times either Waves XX, Y, X or W in both price and time.

 

 

----- Double and Triple ZigZag Guidelines -----

 

 

The largest Wave in Wave W is usually less than Wave W by price.

 

Wave X is usually a Zigzag family pattern.

 

Wave X is usually less than 70% of Wave W by price.

 

Wave X will usually retrace at least 30% of Wave W.

 

Wave X is most likely to be a 38.2% retracement of Wave W.

 

Wave X is next most likely to be a 50% retracement of Wave W.

 

Wave X is next most likely to be a 61.8% retracement of Wave W.

 

The largest Wave in Wave X is usually less than 140% of Wave W by price.

 

The time taken by Wave X is usually between 61.8% and 161.8% of Wave 1.

 

Wave Y is next most likely to be equal to 61.8% or 161.8% of W by price.

 

Expect the time taken by Wave Y to be between 61.8% of Wave W and 161.8% of shortest of Wave W and X.

 

Wave XX is usually a Zigzag family pattern.

 

Wave XX is usually less than 70% of Wave Y by price.

 

Wave XX will usually retrace at least 30% of Wave Y.

 

Wave XX is most likely to be a 38.2% retracement of Wave Y.

 

Wave XX is next most likely to be a 50% retracement of Wave Y.

 

Wave XX is next most likely to be a 61.8% retracement of Wave Y.

 

The largest Wave within Wave XX is usually less than 140% of Wave Y by price.

 

Wave Z is most likely to be about equal to Wave Y by price.

 

Wave Z is next most likely to be about equal to 61.8% or 161.8% of Wave Y.

 

The largest Wave in Wave Z is usually less than Wave Y by price.

 

 

 

--- Double and Triple Sideways Rules ---

 

 

Double (D3) and Triple (T3) Sideways patterns are similar to Flats, and are typically two or three corrective patterns strung together with a joining Wave, called an “x” Wave, and are all corrective in nature.

 

Doubles are not common, and Triples are rare. Doubles are labeled w-x-y, while Triples are labeled w-x-y-xx-z. Both these patterns are included in the list of rules and guidelines below. Only a Double 3 is illustrated below.

 

Wave W may be any corrective pattern except a Triangle, double or triple.

 

Wave C of W cannot be a failure.

 

Wave X may be any corrective pattern except a Triangle, double or triple.

 

The minimum X Wave retracement is 70% of Wave W.

 

The maximum price distance of Wave X is 150% of both the previous Wave and ensuing Wave. All internal data points are considered.

 

Although there is no minimum time for Wave X, the maximum time is 10 times the time taken by Wave W.

 

Wave Y may be any corrective pattern except double, triple or a Triangle in a Triple Zigzag. However, Wave Y cannot be a Zigzag if Wave W is a Zigzag.

 

Wave Y must be greater than or equal to Wave X by price, except if Wave Y is a Triangle.

 

Wave C of Y cannot be a failure.

 

Wave Y must be no more than 5 times either Wave X or W in price and time.

 

Wave Y has no minimum time constraint.

 

Wave XX may be any corrective pattern except a Triangle, double or triple.

 

The minimum Wave XX retracement is 70% of Wave Y.

 

The maximum Wave XX retracement is 150% of previous Wave and ensuing Wave. All internal data points are considered.

 

Wave Z may be any corrective pattern except double or triple. However Wave Z cannot be a Zigzag if Y is a Zigzag.

Wave Z is greater than or equal to XX by price.

 

Wave Z must be no more than 5 times either Waves XX, Y, X or W in price and time.

 

Back to back and double failures are not allowed.

 

If Wave Y is greater than Wave W by price, then the maximum Wave Z price movement is twice the price movement of Wave W.

 

 

 

----- Double and Triple Sideways GuideLines -----

 

 

 

The largest Wave in Wave W is usually less than 140% of Wave W by price.

 

Wave X is usually a Zigzag family pattern.

 

The largest Wave in Wave X is usually less than Wave W by price.

 

Wave X is usually less than 140% of W by price.

 

Wave X is usually greater than 95% of Wave W by price.

 

The most likely retracement for Wave X is 110% of Wave W.

 

Time for X is generally between 62% of W1 and 1.618 of the time of W1.

 

If Wave Y is a Triangle, the most likely length of Wave Y is about 61.8% of Wave W.

 

If Wave Y is not a Triangle, the most likely lengths for Wave Y are 100% of Wave W, 161.8% of Wave W and 10% of the length of Wave W beyond the end of Wave W.

 

The largest Wave in Wave Y is usually less than 140% of Wave W by price.

 

Wave Y is usually less than twice the longest of Wave W and Wave X in price.

 

Wave Y is generally between 61.8% of Wave W and 161.8% of Wave W in time.

 

Wave XX is usually a Zigzag family pattern.

 

The largest Wave in Wave XX is usually less than Wave Y in price.

 

Wave XX is usually less than 140% of Wave Y by price.

 

Wave XX is usually greater than 95% of Y by price.

 

The most likely retracement for Wave XX is 110% of Wave Y.

 

If Wave Y is a Triangle, most likely length by price is 61.8% of Wave W.

 

If Wave Y is not a Triangle, then the most likely lengths are 100% of Wave W, 161.8% of Wave W and 10% of length of Wave W beyond the end of Wave W, all by price.

 

The largest wave in Wave Z is usually less than 140% of Wave Y by price.

 

Wave Z is usually less than twice the longest of Wave Y and Wave XX.

 

 

 

--- Impulse Rules ---

 

 

An Impulse is a five Wave pattern labeled 1-2-3-4-5 moving in the direction of the larger trend. It is the most common Elliott Wave pattern.

 

Wave 1 must be an Impulse or a Leading Diagonal.

 

Wave 2 may be any corrective pattern except a Triangle.

 

No part of Wave 2 can more than retrace Wave 1.

 

Wave 2 must retrace Wave 1 by a minimum of 20%.

 

The maximum time for Wave 2 is nine times Wave 1.

 

Wave 3 must be an Impulse.

 

Wave 3 must be longer than Wave 2 in gross distance by price.

 

The gross price movement of Wave 2 must be greater than either Wave 2 of Wave 1 or Wave 4 of Wave 1.

 

The gross price movement of Wave 2 must also be greater than either Wave 2 of Wave 3 or Wave 4 of Wave 3.

 

Wave 2 must also be greater than 61.8% of the gross movement of each of the above 4 sub-Waves.

 

Wave 3 and Wave 1 cannot both have 5th Wave failures. (A Failure is an impulsive Wave where Wave 5 is shorter than Wave 4 by price.)

 

Wave 3 cannot be less than 1/3 of Wave 1 by price.

 

Wave 3 cannot be more than 7 times Wave 1 by price.

 

Although there is no minimum time constraint for Wave 3, its absolute maximum time limit is 7 times Wave 1.

 

Wave 4 can be any corrective pattern.

 

Waves 1, 2 and 4 cannot overlap except by 15% of Wave 2 with leveraged securities, and then only for a maximum of less than two days.

The gross price movement of Wave 4 must be greater than either the gross movement of Wave 2 of 3 or Wave 4 of 3.

 

The gross price movement of Wave 4 must also be greater than either the gross movement of Wave 2 of 5 or Wave 4 of 5.

 

The gross movement by price of Wave 4 must also be greater than 61.8% of the gross movement of each of these four subwaves.

 

The gross movement by price of Wave 4 must be greater than 1/3 of the gross movement of Wave 2 by both price and percentage movement.

 

The gross movement by price for Wave 4 must be less than three times the gross movement of Wave 2 by both price and percentage movement.

 

Wave 3 and Wave 4 cannot both be failures. (A Failure is an impulsive Wave where Wave 5 is shorter than Wave 4 by price.)

 

Although Wave 4 has no minimum time constraint, the maximum time for Wave 4 is twice the time taken by Wave 3.

 

Wave 5 must be an Impulse or an Ending Diagonal. However, if Wave 5 is longer than Wave 3 by price, then Wave 5 must be an Impulse.

 

Wave 5 must move by price more than 70% of Wave 4. (This is not gross movement. Only consider the end points of both Waves.)

 

Wave 3 must never be shorter than both Wave 1 and 5, by either price distance or percentage price movement.

 

If Wave 5 is truncated, or contains an Impulse that is truncated, then neither Wave 3 nor Wave 4 can contain a subwave that is truncated. (A truncated pattern is where Wave 5 is shorter than Wave 4. This is also known as a failure.)

The maximum movement of Wave 5 is six times Wave 3 in both price and time.

 

Wave 5 has no minimum time constraint.

 

 

----- Impulse GuideLines -----

 

Wave 1 can be a Leading Diagonal, but this is rare.

 

Wave 2 is usually a Zigzag based pattern.

 

Wave 2 usually takes a small amount of time compared to Wave 1. However, Wave 2 is usually takes more than 10% of the time taken by Wave 1.

 

Wave 2 generally retraces more than 30% of Wave 1 including internal data points.

 

Wave 2 will usually retraces less than 80% of Wave 1 .

 

The most likely retracement for Wave 2 is 50% or 61.8% of Wave 1.

 

The gross price movement of Wave 2 should be greater than the gross price movement of Waves 2 of 1, 4 of 1, 2 of 3 and 4 of 3.

 

If the gross movement of Wave 2 is between 33% and 40.3% retracement of Wave 1, it is most likely complete.

 

If the gross movement of Wave 2 has retraced to end of previous Wave 4 of 1, then it is most likely complete.

 

It is unlikely that Wave 3 will be shorter than Wave 1 by price.

 

The most likely price range for Wave 3 is between 1.5 and 3.5 times the price range of Wave 1.

 

Most likely range in time for Wave 3 is between 1 and 4 times the time taken by Wave 1.

 

Wave 4 is rarely a Zigzag based correction.

 

It is common for both Waves 4 & 2 to have approximately the same price movement.

 

Wave 4 will most often retrace more than 20% of Wave 3, including internal points.

 

Wave 4 will very often retrace about 38.2% of Wave 3.

 

Wave 4 does not often retrace Wave 3 by more than 50%.

Wave 4 will often retrace into the price territory of previous Wave 4 of Wave 1.

Wave 4 will most often retrace to the end of the previous Wave 4 of one lesser degree.

 

Waves 2 & 4 usually alternate between Zigzag and Flat. The other alternation is between a Triangle and a Flat.

 

Leveraged markets may at times overlap by up to 15% of Wave 2 by price.

 

The gross price movement of Wave 4 should be greater than the gross price movement of Waves 2 of 3, 4 of 3, 2 of 5 and 4 of 5.

 

Expect the time taken by Wave 4 to be between 100% - 270% of the time taken by Wave 2.

 

Wave 5 will usually move beyond the end of Wave 3.

 

When Wave 5 is extended (more than 161.8% longer than both Waves 1 and 3) a point within Wave 4 will often divide the entire Impulse Wave by 1.618.

 

If Wave 5 is extended (more than 161.8% longer than both Waves 1 and 3), it is common for its price length to be about 161.8% of the gross price length between the beginning of Wave 1 to end of Wave 3.

 

It is unusual for Wave 5 to travel a greater price or time percentage than Wave 3 traveled in its entirety.

 

The most likely price targets for Wave 5 are: 61.8% of Wave 1, 100% of Wave 1, 161.8% of Wave 1, 161.8% of the length from the beginning of Wave 1 to end of Wave 3.

 

If Wave 3 is about equal to 161.8% of Wave 1 by price, the most likely time for Wave 5 is about equal to the time taken by Wave 1.

One of the Impulse Waves (Waves 1, 3 or 5) generally extends (at least 162% times the next longest Impulse Wave).

 

The most likely Wave to extend is the 3rd Wave of an Impulse. However, in leveraged funds when the Impulse is rising and the degree is Primary or above, the most likely Wave to extend is Wave 5.

 

A non-extended 5th Wave of less than Primary degree usually has a lower peak volume than a third Wave. However, when the 5th Wave extends (less than Primary degree), Wave 5 has usually shows more volume.

 

Wave 5, when complete, usually has a lesser slope than Wave 3. However, in leveraged securities when the Impulse is rising and the degree is Primary or above, this is not usually the case.

 

Wave 5 is usually less than 4 times length of Wave 3 by time.

 

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Here's EWP rules and guidelines to get you up to speed

 

I knew it was going to be nice and simple to understand :rolleyes::lol:

 

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I knew it was going to be nice and simple to understand :rolleyes::lol:

 

That's the abbreviated version, my 60,0000 terabyte HDD is n't big enough for the full one, the key is to start when you're young and hope you live long enough. Oh, and don't start trading with real money until you know the rules. You should be Ok you have the patience, especially waiting 18 years for one of your fractal set ups :lol:

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FOCUS on these:

 

It is unlikely that Wave 3 will be shorter than Wave 1 by price.

 

The most likely price range for Wave 3 is between 1.5 and 3.5 times the price range of Wave 1.

 

Wave 4 is rarely a Zigzag based correction.

It is common for both Waves 4 & 2 to have approximately the same price movement.

Wave 4 does not often retrace Wave 3 by more than 50%.

Expect the time taken by Wave 4 to be between 100% - 270% of the time taken by Wave 2.

 

Waves 2 & 4 usually alternate between Zigzag and Flat. The other alternation is between a Triangle and a Flat.

 

Wave 5 will usually move beyond the end of Wave 3.

 

 

If Wave 5 is extended (more than 161.8% longer than both Waves 1 and 3), it is common for its price length to be about 161.8% of the gross price length between the beginning of Wave 1 to end of Wave 3.

 

It is unusual for Wave 5 to travel a greater price or time percentage than Wave 3 traveled in its entirety.

 

The most likely price targets for Wave 5 are: 61.8% of Wave 1, 100% of Wave 1, 161.8% of Wave 1, 161.8% of the length from the beginning of Wave 1 to end of Wave 3.

 

If Wave 3 is about equal to 161.8% of Wave 1 by price, the most likely time for Wave 5 is about equal to the time taken by Wave 1.

One of the Impulse Waves (Waves 1, 3 or 5) generally extends (at least 162% times the next longest Impulse Wave).

 

The most likely Wave to extend is the 3rd Wave of an Impulse. However, in leveraged funds when the Impulse is rising and the degree is Primary or above, the most likely Wave to extend is Wave 5.

 

A non-extended 5th Wave of less than Primary degree usually has a lower peak volume than a third Wave. However, when the 5th Wave extends (less than Primary degree), Wave 5 has usually shows more volume

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The key is to start when you're young and hope you live long enough :D

Indeed! Aren't we lucky to be alive! A kondratieff winter and a grand super cycle bottom on the cards. Great! Not forgetting the jolly little Mayan calendar date nor the prospect of slowly running out of oil and having bugger all in place to soften the blow. We have also maxed out on global population and are likely to have major food shortages, probably war too. Did I miss antyhing?

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xx I want to move this to the new Blog-Journal section. Comments? xx

 

I'll post one of my latest works on here rather than 'Catflaps rally into Q3 blah blah blah' thread since the 4 charts I posted there got 4 or 5 views each (one of which was mine to check it was OK)..... this is the problem of having a bullish (mine) and bearish threads (DrBubbs dairy), the bears don't want to see my stuff or argue with me and the bulls seem to have given up posting on GEI since it's full of bears which can't be healthy for the site. If I stopped posting on here I don't know who would post anything bullish or put the opposing view......

Okay.

Take a look at the PC ratio too. As a Bear, that one worries me a bit. / PC Ratio-chart

 

It will take time to build interest in your thread.

Maybe we should get you on a future GE Radio Podcast.

 

BTW, what did you think of Dave Skarica's Bull arguments / http://tinyurl.com/GER-Doldrums ?

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BTW - is it possible you can increase the storage for attachments. I have to keep deleting older ones so that I can post new ones since the limit is 500k which in my case equates to a pathetic 11 charts. I've not had to delete any on HPC and must have posted 50 or so - the last time I looked the available space used for attachments was only a fraction of what was still available.

 

I don't know how to do that.

Why not use: http://Imageshack.us ?

 

You can do this

zzzzcq.png

 

... and this: Walker's-PC ratio chart-updated

zzzzx.png

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CF,

You may like this:

 

Market Still Following 1937 Pattern

 

In 1937 All Over Again I laid out the case that we are following the pattern of the original double-dip, the reversal in 1937 that broke the hope of coming out of the Great Depression.

 

James Shaw at SeekingAlpha had first suggested this pattern back in 2008, and updates his analysis today. The chart is a bit busy, but you can see he overlays a simplified pattern of our market on top of the 1937-42 market. If the pattern continues, here is the roadmap:

 

flat for the rest of August

bounce in Sept/Oct

sharp drop in Nov/Dec

sickening slide for two more years

new low in 2012

 

/more: http://yelnick.typepad.com/yelnick/2010/08...n.html#comments

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I may move the Blog-Journals to another section.

Please comment / here: http://www.greenenergyinvestors.com/index....showtopic=10777

 

If you don't want the move, and a majority with Blogs also do not want it,

I will very happily leave things as is.

 

The idea was to make it easier to get to the Blog-Journals, and to increase visibility

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Okay.

Take a look at the PC ratio too. As a Bear, that one worries me a bit. / PC Ratio-chart

 

It will take time to build interest in your thread.

Maybe we should get you on a future GE Radio Podcast.

 

BTW, what did you think of Dave Skarica's Bull arguments / http://tinyurl.com/GER-Doldrums ?

 

You might want to look at Equity Put Call Ratio as well - this one shows relative fear and complacency:

 

http://stockcharts.com/h-sc/ui?s=$CPC...amp;a=200440356

 

 

I've got used to doing the attachments but can see I'm going to have to use Imageshack or Tinypic so the charts I post don't have to be deleted because I run out of attachment space - just thought there might be a setting on the forum software that might allow users a bigger capacity and that this might just be the limited default one.

 

 

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CF,

You may like this:

 

Market Still Following 1937 Pattern

 

In 1937 All Over Again I laid out the case that we are following the pattern of the original double-dip, the reversal in 1937 that broke the hope of coming out of the Great Depression.

 

James Shaw at SeekingAlpha had first suggested this pattern back in 2008, and updates his analysis today. The chart is a bit busy, but you can see he overlays a simplified pattern of our market on top of the 1937-42 market. If the pattern continues, here is the roadmap:

 

flat for the rest of August

bounce in Sept/Oct

sharp drop in Nov/Dec

sickening slide for two more years

new low in 2012

 

/more: http://yelnick.typepad.com/yelnick/2010/08...n.html#comments

 

I was also suggesting this pattern in 2008 during the crash and you might remember me saying that 'I could see the possibility of this 5th wave down another 15% or so that takes us into March 1938' but I knew nothing about EW at the time.

 

But as I explained on my K-wave thread, the decline was a lot shorter from the 1937 peak (around a year) which only gave a 1 year cyclical bull market advance. Later on the chart pattern is extremely unreliable as Louise Yamada also confirms and I attribute this to the pending WWII and the chart pattern doesn't settle down until some time later. The Japanese K-wave at this point is a better indicator and in terms of time from the October crash lows the time is almost identical to the absolute lows.

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I may move the Blog-Journals to another section.

Please comment / here: http://www.greenenergyinvestors.com/index....showtopic=10777

 

If you don't want the move, and a majority with Blogs also do not want it,

I will very happily leave things as is.

 

The idea was to make it easier to get to the Blog-Journals, and to increase visibility

 

I think this thread only has a limited life anyway, because it's about the 18-month cyclical bull market which I've projected to peak in late August/early September, so in time it will just sink to the bottom.

 

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I think this thread only has a limited life anyway, because it's about the 18-month cyclical bull market which I've projected to peak in late August/early September, so in time it will just sink to the bottom.

We can change the title - What would you like it to be?

 

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We can change the title - What would you like it to be?

 

Thanks, I'll think of something over the next few weeks but think it's better to change it later once we know the market has topped and a new bear market is underway.

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Thanks, I'll think of something over the next few weeks but think it's better to change it later once we know the market has topped and a new bear market is underway.

Hmm.

For some of us, that has happened already

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Hmm.

For some of us, that has happened already

 

Well there's still no Dow Theory primary trend change, despite the sell-off in April, May and June and their hasn't been a MACD crossover on the monthly charts, despite us being almost 4 months past the April 2010 peak.

 

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I think it's likely the top will come a little later than I've projected. One method I use based on momentum was predicting a peak around August 27, 2010 (which appears a little too early) whilst the fractal work on my K-wave theory was saying September 3, 2010 after the April peak was in. Adding the same number of calender days from the October 27, 2008 low to the April 23, 2010 peak onto the March 9, 2009 lows gave a predicted peak of September 3, 2010.

 

Taking the price peak on April 23, 2010 down to the July 2, 2010 bottom gives 49 trading days - add 49 trading days to July 2, 2010 and you get September 13, 2010 when you take into account the US market will be closed on Labour day (first monday in September) so the topping out could occur between September 3, 2010 and September 13, 2010.

 

The cumulative Advance-Decline line has made new highs above those in April so there's another positive divergence here which says price should go back to the April highs:

 

http://stockcharts.com/h-sc/ui?s=$NYA...amp;a=191477003

 

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The cumulative Advance-Decline line has made new highs above those in April so there's another positive divergence here which says price should go back to the April highs:

http://stockcharts.com/h-sc/ui?s=$NYA...amp;a=191477003

"New highs"?

Anything is possible, I suppose. But I think you should accept : You are running out of time for such a big rally.

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"New highs"?

Anything is possible, I suppose. But I think you should accept : You are running out of time for such a big rally.

 

I agree - minimum of two weeks and maximum of 3 weeks to reach the old highs and maybe exceed them a little. Just doesn't seem possible, but a massive amount of shorting is keeping a lid on prices at the moment. A big short squeeze is what will cause prices to quickly reverse back to their old highs and exceed them a little and that could be swift as the tiered level of stops under the old highs get hit in a domino fashion.

 

..... the fractal work on my K-wave theory was saying September 3, 2010 after the April peak was in. Adding the same number of calender days from the October 27, 2008 low to the April 23, 2010 peak onto the March 9, 2009 lows gave a predicted peak of September 3, 2010.

 

 

 

This chart probably explains the 18-month cyclical bull market better - had the March lows not taken out the November 2008 lows then we would have had a final top (maybe double top) in May 2010. But the absolute lows came on March 9, 2009 which gives us an 18-month cyclical advance from there.

 

Had I thought about this more, then I would have predicted a major low would have come in late June/early July which I've shown on the chart.

 

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I agree - minimum of two weeks and maximum of 3 weeks to reach the old highs and maybe exceed them a little. Just doesn't seem possible, but a massive amount of shorting is keeping a lid on prices at the moment. A big short squeeze is what will cause prices to quickly reverse back to their old highs and exceed them a little and that could be swift as the tiered level of stops under the old highs get hit in a domino fashion.

imho:

A little pop in the next few days might set up a good drop

 

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