2 replies to this topic

[gannman]

my take is wave 3 down in the dow started this morning. well see should be no new highs here. this whole rally was a wave 2 pretty impressive but still a wave 2. gann

[Doug]

my take is wave 3 down in the dow started this morning.
well see should be no new highs here. this whole rally was a
wave 2 pretty impressive but still a wave 2.

gann

Here is my read. (Charts are through Wednesday 09-26-2007)

DOW chart, Daily


The rally pattern for the DOW would look better with another push higher. The past week's consolidation looks bullish for another rally and the parallel up-channel for price action since the August 16th low supports another high above 14K. Price even found support at the mid line of the up-channel on Tuesday's pullback. The very short term pattern of the rally off Tuesday's low shows a small 5-wave move and therefore leaves open the possibility that Wednesday's high completed the rally. Therefore any break back below Tuesday's low would be a heads up that something more bearish may have begun. It takes a break below 13400 to put the bears back in the driver's seat and I suspect we'd see the DOW struggling to hold onto the 13K level for October opex.

But as long as Tuesday's 13696 low holds then I'd continue to buy the dips (scalp trade only) for a run up to a target zone of 14K to 14200. Then it would be time to get short for a large decline from there.

DOW chart, 60-min


The corrective wave structure the past week leaves open several possibilities and without trying to make it too complicated that's what I'm trying to show on the 60-min chart. The more immediately bullish possibility (in green) is that Tuesday's low finished the pullback and now we're seeing the next (and should be last) rally leg that will take the DOW above 14K. It's possible we're seeing a larger sideways consolidation that is forming an expanding triangle (shown in pink) which calls for another leg down inside the pattern to finish it. It should stay above 13600 in that case and from there we'd get a strong rally leg to potentially the 14200 area. This scenario would likely have the DOW finishing October opex in the 13500-14000 area.

The more immediately bearish scenario (dark red) calls Wednesday's high as the end of the 5-wave run up from Sept 10th. The rally from Tuesday's low counts well as a small 5-wave move for the 5th wave (wave-(v) on the chart). The bulls do not want to see the DOW back below 13780 in any pullback from here otherwise it would likely mean we're either on the pink or dark red price path. As noted by the negative divergence shown on RSI, this is either bearish with the 5th wave bearishly divergent against the 3rd wave (as it should be) or else the oscillators have been resetting themselves with time instead of price (which would be bullish). That's why a break below 13780 would be potentially bearish.

Regards,

[gannman]

my take is wave 3 down in the dow started this morning.
well see should be no new highs here. this whole rally was a
wave 2 pretty impressive but still a wave 2.

gann

Here is my read. (Charts are through Wednesday 09-26-2007)

DOW chart, Daily


The rally pattern for the DOW would look better with another push higher. The past week's consolidation looks bullish for another rally and the parallel up-channel for price action since the August 16th low supports another high above 14K. Price even found support at the mid line of the up-channel on Tuesday's pullback. The very short term pattern of the rally off Tuesday's low shows a small 5-wave move and therefore leaves open the possibility that Wednesday's high completed the rally. Therefore any break back below Tuesday's low would be a heads up that something more bearish may have begun. It takes a break below 13400 to put the bears back in the driver's seat and I suspect we'd see the DOW struggling to hold onto the 13K level for October opex.

But as long as Tuesday's 13696 low holds then I'd continue to buy the dips (scalp trade only) for a run up to a target zone of 14K to 14200. Then it would be time to get short for a large decline from there.

DOW chart, 60-min


The corrective wave structure the past week leaves open several possibilities and without trying to make it too complicated that's what I'm trying to show on the 60-min chart. The more immediately bullish possibility (in green) is that Tuesday's low finished the pullback and now we're seeing the next (and should be last) rally leg that will take the DOW above 14K. It's possible we're seeing a larger sideways consolidation that is forming an expanding triangle (shown in pink) which calls for another leg down inside the pattern to finish it. It should stay above 13600 in that case and from there we'd get a strong rally leg to potentially the 14200 area. This scenario would likely have the DOW finishing October opex in the 13500-14000 area.

The more immediately bearish scenario (dark red) calls Wednesday's high as the end of the 5-wave run up from Sept 10th. The rally from Tuesday's low counts well as a small 5-wave move for the 5th wave (wave-(v) on the chart). The bulls do not want to see the DOW back below 13780 in any pullback from here otherwise it would likely mean we're either on the pink or dark red price path. As noted by the negative divergence shown on RSI, this is either bearish with the 5th wave bearishly divergent against the 3rd wave (as it should be) or else the oscillators have been resetting themselves with time instead of price (which would be bullish). That's why a break below 13780 would be potentially bearish.

Regards,

doug
thats some nice work brother as we all know ewave counts are mutable lol to say the least
well know very soon whats u
regards
gann