Charts, page-4071

Essentially it is EW theory combined with conventional pattern analysis. I combine them to get multiple indicators intraday - I am much better intraday to a few days than longer periods. Time periods are always a bit shakey, whereas price targets tend to be much more reliable. So for this current set of predictions, I have assumed we are in a 3 step ABC EW correction after a 5 wave impulse rise. I have put in a new chart below to held explain.


The correction wave is marked ABC. The first thing to note is that commonly the C wave is the height of the A wave. That gives a target of 501.6, next the bear flag marked with purple parallel lines gives a target on the break of the length of the flag pole which I find works best if you measure low to low (or high to high if a bull flag), and this gives a target of 505.9 on the break (subtract the pole length from the bottom line of the flag where the clean breach occurs. Next the ABC correction target can alternatively be 160% of the A wave (that tends to be the outer limit) which in this case gives 441. Lastly it is rare in a rising EW sequence for the wave 5 retrace to go below the bottom of wave 2 (ie. the start of wave 3) which in this case is 509, so 3 targets agree, and one is a long way off, thus I go with the majority target.

Now for timing, that is a lot harder. First there is a fib timing pattern - the vertical blue lines which is created by lining up the two A and B wave tops, it then predicts approximate timings for significant turns, but not necessarily the turns you are after. Works better on rising impulse waves I find. Next there is just the conventional channel projection, once the price targets are established, just continue the channel down to the intercept point which in this case gave between 12:00 and 2:14. This case there is an outer channel (not marked in) which gives a time of around 2:50 that was created when the bear flag breached the channel edge.

Other things applied were conventional shapes like wedges, essentially a rising wedge gives a target on the break of the vertical height of the wedge at the first contact point opposite the start contact (ie. contact 2) subtracted from the price at break, and vice versa for a declining wedge. Triangles (where the top or bottom is flat are not wedges and tend to break in the direction of the entry trend (ie continuation triangles), but have the same calculation of vertical height for the target. Wedges tend to break about 2/3'rds along.

Note that in the latest chart above a declining wedge has been formed after the flag / rising wedge break, which creates an interesting situation.

To trade all this, I will probably wait for the wave 2 to finish after the turn if it doesn't get to my target. Otherwise I will look for the MACD to cross and the RSI to be below 30% in the target zone. If it forms a wave 1 early then I will look for the 78% retrace in wave 2 and then the reversal in the MACD + RSI to confirm and then chase the third wave which should have a target of 160%+ of the first wave added to the base of wave 2. On the rise, while ever it stays above the ichimoku cloud (the red/green shaded areas we are good. Lastly on the 5 minute chart (this is a 1 minute), the last confirmation comes from the 9 & 21 EMA's crossing, but the trade is usually done by then because I work in 1 minute charts. If it fails to cross I may exit the trades.

Any thing above the 441 outer target has reasonable risk attached, down at 441 I think it becomes much lower risk, but probably also much lower probability of being reached.

As it stands right now it looks to be slowing down a lot, but the queue weights have not changed significantly, so I would not be surprised if the strategy being employed is to wait until closer to the end of day and then slam it down for the last bit in a rush. Timing matters in this because if it closes on the days low it is much more likely to go down again tomorrow. Interestingly yesterday I marked off 530 on the daily chart as a buy target, but I can't remember why I set that, and looking at today's chart I'd be hesitant about that, still yesterday I apparently thought 530 was the target, so hmm and it sure looks to be hovering around there now. I just remember yesterday as total chaos because I was distracted by wifey and accidentally left a buy order in the queue from the rising sequence that didn't get filled and then was filled on the way down before I came back to the trading desk, which of course turned into a bit of a mess.