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Thursday, September 24, 2009

EOD Count Sept 24

Continuing with the thoughts from my last post: Mid-Day Count Sept 24.

Here is a look again at the ending diagonal. A few observations:

This does not have to count as an ending diagonal.
1) The count so far is a valid 5-3-5-3 for Minute 1-2-3-4. However, the count could easily be interpreted as a 3-3-3-3 based on how exaggerated wave 4 of 1 was and how Wave 3 has very much the shape of a zigzag (the biggest correction comes right in the middle)
2) Minute 4 does not go into Minute 1
3) Minute 3 is the longest wave

However it certainly does *act* like an ending diagonal
1) Minute 1 was the technically strongest most impulsive wave of the run
2) We see a large amount of negative divergence in the RSI during the whole run.

I made similar observations back in the end of August when I was theorizing that Wave C would be an ending diagonal (Aug 22: Looking at the Rally Progress, Bigger Picture, and Some Wave Comparisons and Aug 23: Indicator Thoughts to Accompany My Last Post

Alphahorn put up a similar count. However, Columbia and I thought about this possibility back on Aug 22: Looking at the Rally Progress, Bigger Picture, and Some Wave Comparisons. It took a long time for this diagonal to come to fruition, and it didn't look like one for the longest time, but now I think it is finally materializing and showing itself.

On to the preferred count: I still think we are in Minute 4, and it is very close to finishing up.

Here was the diagonal beginning to show itself, finally :)

From 12:49 -- Daily chart: I think we are retesting the EMA 20, and I think this coincides with the end of Minute 4.

From 3:55 -- Yep. Perfect bounce off 20 day EMA

Edit 6:00 pm --

Chart for Wags. Wags, simply because we have an impulse off the bottom does not mean the count can be called bullish or bearish at this point. Yesterday could have been the top of P2, we have a 5 wave down today followed by 5 wave up that forms the A leg of a zigzag. This is a perfectly legal (and to be honest not all that unexpected or unusual count). We need more price action to confirm either the bearish or the bullish call.

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