Sunday, August 13, 2017 12:25:09 PM
Resolving INDU E-Wave Count Confusion
Counting e-waves since January 2016 in the Dow Industrials has been a challenge. Any 5 wave count looks disproportionate. The wave count I propose does not follow strict rules; however, it contains fewer violations while retaining proportionality.
My premise is the wave from the Jan 2016 lows is an ending diagonal with distortion due to the Federal Reserve.
Wave 1 from Jan 2016 low to Aug 2016 high.
Wave 2 ends in early Nov 2016 lows.
Wave 3 ends at the March 2017 highs.
Wave 4 ends at the May 2017 lows,
Wave 5 ended at August recent highs.
Each segment is clearly a zig-zag; however, waves 1 and 5 do not overlap. I attribute this to the Federal Reserve. Even with the Fed interference, Waves 1 and 3 were nearly equal, while waves 3 and 5 were a fibonacci ratio of 2. What the Federal Reserve could not control was the near fibonacci sequence of 142, 80, and 55 days for the duration of waves 1, 3, and 5, respectively. Waves 2 and 4 are nearly equal, with wave 2 taking a little longer.
How much is the Fed distorting the Industrials?
For waves 1 and 5 to conform to the rules of an ending diagonal, wave 5 must overlap wave 1, so wave 5 would have had to start at least 1932 points lower, or 9.4% lower!!! Ideally wave 5 would have started 3000 points (15%) lower.
The bottom line is wave 5 looks complete, so we'll see if the FED is willing to step in front of a sharp drop of 10-15%.
Counting e-waves since January 2016 in the Dow Industrials has been a challenge. Any 5 wave count looks disproportionate. The wave count I propose does not follow strict rules; however, it contains fewer violations while retaining proportionality.
My premise is the wave from the Jan 2016 lows is an ending diagonal with distortion due to the Federal Reserve.
Wave 1 from Jan 2016 low to Aug 2016 high.
Wave 2 ends in early Nov 2016 lows.
Wave 3 ends at the March 2017 highs.
Wave 4 ends at the May 2017 lows,
Wave 5 ended at August recent highs.
Each segment is clearly a zig-zag; however, waves 1 and 5 do not overlap. I attribute this to the Federal Reserve. Even with the Fed interference, Waves 1 and 3 were nearly equal, while waves 3 and 5 were a fibonacci ratio of 2. What the Federal Reserve could not control was the near fibonacci sequence of 142, 80, and 55 days for the duration of waves 1, 3, and 5, respectively. Waves 2 and 4 are nearly equal, with wave 2 taking a little longer.
How much is the Fed distorting the Industrials?
For waves 1 and 5 to conform to the rules of an ending diagonal, wave 5 must overlap wave 1, so wave 5 would have had to start at least 1932 points lower, or 9.4% lower!!! Ideally wave 5 would have started 3000 points (15%) lower.
The bottom line is wave 5 looks complete, so we'll see if the FED is willing to step in front of a sharp drop of 10-15%.
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