9/1/11

This wave pattern is doing everything humanly possible to ensure that I can't figure out what it is.  There are "threes" everywhere.  But I did my best.

Yes, that is a large black "2" you see there, indicating that I believe Minor 2 to be over.  Yes, already.  (Which raises the question, why did I sell off my shorts today?  I don't know.  Nervousness, plus the distinct possibility it isn't?  At least I profited a bit from them.)  This seems to work the best with the sizes of the waves we know.

It should also be pointed out, though not shown on the chart, that the 1230 high almost exactly reaches the top of the channel line drawn from the 1208.47 Aug. 16 high parallel to the 1101.54-1121.09 lows.

A new downtrend, either Minute [v] or Minor 3, is not truly confirmed until we see a significant breach of 1190 and especially of 1181.  Until then, it is reasonable to consider the possibility (my large-scale alternate, as it happens) that Minor 1 bottomed at the price low of 1101, and Minor 2 is tracing out a flat with us currently in (iv) of [c]; in such a case, we could expect Minuette (v) up to... technically, anywhere short of 1350 (or 1370 if that was in fact the orthodox high), though probably not much more than 1240 (which the parallel channel crosses on Tuesday).  But a substantive breach of 1190 would nullify this count (it would have to be a pretty crappy diagonal).  Also, KRAP (currently at 1500.30) might want down, too, but as I have no intraday data for that it's hard to see what its waves are doing.

Obviously, since I postulate Minor 3 is underway, I am faced with the difficulty of what degree the waves are.  Strictly speaking, Minor 3 has no invalidation point; in practice, logical stopping points are 1017 (3=1 on log scale, and essentially THE invalidation point for bull counts (1010)) or, more likely, 904 (3=1.618*1 on log scale).  I think putting the waves at the degrees I showed is probably fairly accurate. 

These degrees (after my Minor 2, that is) also work well for Minute [v] counts, since a Minute [v] of 1 would, I think, look a lot like a Minute [i] of 3.  Additionally, the bottom of the channel currently is at about 1140; the Minute [ii] retracement in my primary would likely result in a retest of the channel bottom, which makes sense proportionally for a Minute [i] of 3 that looks like a Minute [v] of 1.