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Wednesday, May 9, 2012

May 9

We got a sub-cycle bottom signal today on divergence with my 60-minute system: https://twitter.com/#!/binve01/status/200275729206878208.

There is a lot about the short term that looks compelling from a pullback perspective. Also the 'analogy' chart that was discussed on May 2 has a more complete look to it. Also notice the lower orange PPO indicator. It did not go into divergence at the top of the wave like it did at the 2010 and 2011 tops.

The next section is my current EW count. Feel free to skip this section if you are not interested.

First is the count of the most recent correction. And I see two sharp 7 waves down with a complicated/messy 3 wave up in the middle:

Zooming out is the count up from the Oct low which was discussed Apr 10 (and no, it's not an impulse):

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.

Zooming out again is my 'near-term' daily chart.

And here is my 'longer-term' daily chart.

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