Sunday, May 3, 2009
The P2 Playout (on a busy chart)
This is something I keep to fool around with. Remember this is a basic example of a possible form for P2 that I used some fibs, retracements and tried to fit into a steep diagonal leading to P3. Main two things to look at are the RSI and MACD extremes that are displayed very well on this chart. The declining volume shows how weak this rally is becoming. The pink dashed lines show how this wave P2 will possibly play out. I would expect the overall formation of P2 to remain difficult to count. One thing is that according to EWT this means 4 should be an easy count (and it just might be because after P3 there may be not much left to count). The larger black diagonal is hypothetical. Looking for a pullback in the 800 to 775 range before the larger move up this summer. The pullback may be quick and over in a week or it could be drawn out. I' believe it will be quick lasting a week or two and then the bulls come back in strong. Daneric has a nice chart in his chartbook that shows the form only of how the whole movement of P1 thru P5 might play out. I may add one, but since he's got it (and he's better) use his.
Have a good Sunday.