Wednesday, August 10, 2011

 

3 Wave pattern indicates that down trend is still in force


In this 10 minute chart of the mini-Dow chart shows a large 3 wave pattern which is a strong indicator of a continuation of lower prices. The range is from 10,401 to 11,263 so either we head down now or continue to consolidate in this range for awhile, we might be correcting the down trend that began with the 12,754 peak on 7/22, and head lower in a week. Either way this pattern has a high probability of lower prices at some point.

Trading corrections like this is tricky. The key is to know you are in one and to try and not get caught by false breakouts. For example, the move down today could be the low of the day making it part of the larger a-b-c-X-a-b-c. Fun right! If we go under the low of wave B, 10,550, I would take that as a resumption of the down trend. So hold onto your hats because no matter what there are going to be some big swings ahead.

Labels: ,


|

<< Home

This page is powered by Blogger. Isn't yours?