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Thursday, August 25, 2011

Major US indices still in a fourth wave

Looking at the lower chart in the first image below, the /ES on a 4H chart, seems to be tracing out a triangle.  This will likely extend out for another week at least before taking out the 8/9 lows to complete the fifth wave.  What is not entirely clear to me is whether that will complete the higher degree wave (1) of intermediate degree, or whether we'll need one more push down. 

If I were only looking at the Dow or the S&P 500, I'd say the next push down could complete (1), but looking at the Russell 2000 small cap index (next image), it looks like the next push down will only complete the third wave.  Therefore, it is better to be cautious and assume that while we should get a rally after new lows, it may not be the end of intermediate wave (1).



Posted by Waverunner (FractalTrader) at 8:56 AM

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Notation


Wave DegreeMotiveCorrective
Grand Supercycle((I)) ((II)) ((III)) ((IV)) ((V))((a)) ((b)) ((c))
Supercycle(I) (II) (III) (IV) (V)(a) (b) (c)
CycleI II III IV Va b c
Primary((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))
Intermediate(1) (2) (3) (4) (5)(A) (B) (C)
Minor1 2 3 4 5A B C
Minute((i)) ((ii)) ((iii)) ((iv)) ((v))((a)) ((b)) ((c))
Minuette(i) (ii) (iii) (iv) (v)(a) (b) (c)
Subminuettei ii iii iv va b c
Micro((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))