I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Tuesday, April 10, 2012

Apr 10

Current EW count for anybody that cares.

First up is a 2-year chart. As I have said on many occasions, tops are processes and bottoms are events. The PPO(14,13,10) in the upper pane is good at finding bottoms, which was another reason why I called the October low in near real-time (see Revisiting the Large Count). But this indicator is too fast to capture the rolling-over 'process' that is associated with tops, and the PPO(34,89,21) in the lower pane is much better suited to that task.

Drilling down to a 1-year chart to see the Minute degree waves at work.

Count since the October low where the waves down to the ~Subminuette/Micro degrees are identified.

Now, I am sure I will get comments about my counts. That these W-X-Y's don't follow the EW orthodoxy (to which I say the orthodoxy is completely incorrect: http://marketthoughtsandanalysis.blogspot.com/2011/08/regarding-tops-and-sloppy-misleading-ew.html#comment-276329829). Or that all these W-X-Y's are 'unhelpful' and complicating what could be counted as simpler wave forms.

I disagree on both counts. The fact is that the structure of this wave at nearly all degrees of trend has been distinctly three-ish ever since the March 2009 low. And for anyone who is looking at the waves objectively, we can see threes even in the move since the October 2011 low. You really don't get impulsive waves until you drill down to the micro/submicro degree. It is all right there, plain as day:

The fact that I don't suffer from the affliction where I try to shove every sharp wave into an 'impulse box' means that I am seeing the waveforms more objectively than the greater EW community. It is precisely this view that allowed me to call the top last May when the rest of the EW community was looking for another wave up to finish the 'impulse': Regarding Tops and Sloppy / Misleading EW Practices.

But even despite these observations, I am sure I will get more comments telling me that I am wrong / don't know what I am doing than those that actually agree. And you know what, I am fine with that. In fact, I am better than fine, I am ecstatic. I love being the minority opinion. I love suggesting things and making observations that the crowd is missing. So I am extremely comfortable and happy in my 'wrongness'.
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