Sep 182011
 

When we are trying to adjust our wave counts in a dynamic environment, it is important to be aware of the potential of an alternate count. This is why I had posted a second time on 12 Sep, hinting that we could get a rally to 1.3840 if the decline we saw to 1.3500 was an extended fifth. I urge you to revisit the first chart posted on 12 Sep and compare that with this one. Wave analysis is not a black box that gives you all the answers, but if you are alert to the possibilities, you can quickly hop off the wrong train and get on board the right one.
Typically, when we get an extended fifth wave, a recovery will be seen to wave ii of the fifth wave. However, extended fifth waves are also subject to a phenomenon known as a double retracement. (See my book Five Waves to Financial Freedom for details). We see that wave ii of the extended fifth lies above 1.4100. But given the current bearish stance, we might not get there directly. Don’t be surprised if we experience a deep pull back before the second retracement.

  One Response to “EURUSD chart revisited”

  1. Evening Sir,

    This is what I think Euro is doing, 4hrs chart: http://screencast.com/t/1xJa6Emh7YK

    I think it has just started the 5th wave today. according to your book, wave 2 was simple and shallow, so wave 4 should be complex and deep on retrace. If this wave count is correct, then because neither wave 1 or wave 3 has extended, so the 5th wave should in theory extend. please see the below

    Here is the daily chart, http://screencast.com/t/obztOl9M

    working in the C wave of a flat ABC, so if wave 5= 0.764*(distance from 0 to end of wave 3), it coincides with wave C=1.382*A measuring from the beginning of wave B.

    Alternately, the entire C wave on the chart can be a zigzag, from 0 to wave 3 is actually 5 waves(same to your wave count) and the 4th wave is abc, and 5th wave is another five waves.
    ————-

    Also just like to say, your book is amazing, after read your book, some part I read a few times, my trading result has improved a lot, I am now more confident when taking trade which on the other hand helped me on the trading psychology, it made everything falling into places for me really. A Big Thank You.

    Yan

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