E-wave as a original theory was all about price structure rather than momentum. But looking at momentum does add value. When we say wave 3, the question is always of what degree ?
5/34/5 on monthly is as good as it gets when it comes to long term analysis of the market.
Look at 1987. We had a peak in monthly MACD and then folks like Prechter thought that was the cycle degree top. Once the 1987 MACD top was taken out in 1995 by a higher MACD, it was clear that the primary wave from 82 was extending. At that point people with little bit of IQ could assert that 1987 was not a cycle degree top, not even a primary degree top. But a supposedly high IQ guy like Prechter kept asserting about cycle, super cycle and grand super cycle top as went into 2000. It was a no brainer. After the 2000 collapse it was clear that a primary degree wave 3 had topped. The rally from 2003 was a primary degree wave 5 which diverged in 2007, with the MACD top made in 2000. Post 2008 collapse it was clear that 2007 was a primary 5 top and a cycle degree wave ended in 2007.
As the rally from 2008 started it was not clear whether we had started a new cycle degree wave up or just a primary degree wave B. Once the 2007 MACD top was taken out in 2104, it was apparent that a new cycle degree wave had started. Right now without an iota of doubt we remain in a primary degree wave 3 (cycle degree wave 1). So we have a long way to go in terms of the cycle degree wave. But one can only guess when the primary wave 3 will top out. It does not ring a bell at primary degree tops. But at least post price action will help us to assert when that has occurred. There are many tools to do that. When SPX 1376 broke in 2007 i warned of a long term top. Right now we are no where close to it and is least of my worries. When it occurs i will know it. Being a short term trend follower, i will catch it and trade it.
I will post a chart later for those who might be guessing what i am talking about.
Edited by NAV, 12 October 2017 - 10:31 AM.
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