An A-wave up followed by an A-wave down? When I just started learning Elliott Wave theory, some of these concepts were very difficult to grasp.
Just look at the situation we have here.
We have a bear market rally, beginning with an impulse wave higher. It is correcting the larger degree trend, so it will ultimate subdivide into three waves or a combination of three wave structures. The fact that the first wave up is an impulse tells us it's a zigzag, or wave W will be a zigzag if it turns into a combination. We only have the A-wave. I've chosen to label it as minute wave ((a)), though the specific degree may have to be amended later (you do not always know the exact degree in real time, but to paraphrase what Prechter and Frost say in their book, it's usually not that important in making relative forecasts). In any case, assuming minute wave ((a)) up is accurate, we still need ((b)) down. Wave ((a)) is five waves, but ((b)) will correct the one larger degree trend, which is the entire ((a))-((b))-((c)) rally, or minor wave 4 up. Therefore ((b)) down will subdivide into three waves, (a)-(b)-(c). So if you think about it, you will always have an A-wave followed by an A-wave.
It's currently 1:30pm central, and we have only one and a half hours remaining. I think we will rally into the close as I predicted in my previous post. There should be plenty of opportunity to "buy the dip" next week. I wont be actually buying of course, but rather selling the right to be short. After a full week of vertical rally, it will take a decent sell-off to force profit taking, and turn folks bearish again. If ((b)) ends up being shallow, I will simply step aside.
And speaking of folks getting bearish again, I wondered how bullish this week's market action turned traders.
Basically, traders are by no means bullish yet. They need a lot more convincing, which is where wave ((c)) up will come in.
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