Hi Teaparty,
I look at EW rather simply, and from this perspective, I see a different count than what you have on your first chart with the $RUT. What's throwing me off, you have the 3rd wave labeled as the smallest wave, in your 5 wave count.
So, I put the first wave in the fib calculator, to see what the projected high would be for the next wave (big 3). Using the 515 low and 656 high, the expanded target from the subsequent low of 570 works out to be about 797. This shows me that we are likely concluding big wave 3 now (570-801) as this resistance area is where the consolidation began last month. If you draw a horozontal line at that projected high (796.89) on your 3 year chart, it sure looks like the 3rd wave rally stopped nearly precisely at 1.618 times the move of wave one. So, to me, it looks like your "345AB" is "12345" of big 3, and now we're beginning 4. Also, "little 3" from 615 to 785 works well with this count, being bigger than little 1 and little 5. Again, it's just a simple look, and there may be some other EW rule in play that I don't remember (invalidating my count) so I'm just offering this up FWIW.
If so, the most obvious confluence area of support (i.e., target) is 658.5, based on a 61.8% retracement of the move from 570 to 801 (calculated = 658.26) and the 50% retracement of the move from 516 to 801 (calculated 658.50, within 1/4 point of the 61.8 retrace of wave 3 on my count).
That said, I'm looking much more simply at the pattern, and this view is what makes sense to me.. at least for the $RUT. Off to work now...
Oh... haven't told you this before, but I've really enjoyed your analysis... ever since joining this board. Thanks a million for offering up so much to everyone.
Edited by Net, 14 January 2007 - 10:16 AM.