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Tuesday, December 22, 2009

Count Choculitis

Okay, finally back to having a preferred count. It feels good to be out of that range. Kevin had it right all along. And true to form his observations won out (see this conversation from 6 days ago: http://marketthoughtsandanalysis.blogspot.com/2009/12/these-pipes-are-clean.html#comment-25866929. Kevin, you are da man!!! ).

Since the low on Friday, I can count 5 clear waves up, which I count as a 1 of C. And I think this is consistent with what the triangle / Minor B is telling us. Based on the width of this triangle, I get a target of 1135-1140. And so the current 5 wave move is too short (and not long enough in duration) to reach that target and be consistent with a Minor C.

So, as of right now, this is my preferred count

A word of caution: We got a breakout and then a reversal. The bears will call this a bull trap (the real bull trap will be if this thing runs all the way to 1140. That is the short spot I would like to see) as we are reversing hard. However, don't be surprised if this thing pulls back all the way to 1100. That is the price pivot for the whole trading range. Be *very careful* because I think a sharp Minute Wave 2 pullback will look an awful lot like a bear trap. My $0.02.

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