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Monday, March 15, 2010

Dow Theory / Elliott Wave Projection for P2

I have a pet theory that I have been noodling around with for awhile. One of the major tenets of Dow Theory is the idea of confirmations [that the continuation of uptrends and downtrends need to be confirmed by both the Industrials and the Transports (both making higher highs or lower lows together)] and non-confirmations [when divergence between the Industrials and the Transports take place (one makes a higher high / lower low while the other does not) it often signals or foreshadows a major trend change]

I have been watching the Transports start to make much different wave patterns than the Industrials at the Intermediate Degree for months. But I was confused because I thought the January top was likely the top of Primary 2.

But as of a couple of weeks ago I abandoned that idea and I now have a projection of how P2 can work out from an Elliott Wave perspective and still fit with the non-confirmation idea from Dow Theory.

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