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.


  1. I don't think the C leg is going to look like that. I think it's going to be much more horizontal. Corrective waves are supposed to be very very OVERLAPING and grinding and grueling. And since the A up was not, that leaves the C up, which "has" to be almost all by itself. The A wave was jumpstarted via the short covering from the initial push from the bottom. The C wave wont be near as verticle, imo.

    Plus something to me just doesn't feel right. I mean "everyone" and their mother is "looking" for this "pullback" then a "free ride to spx 1000. Which means i don't think it's going to happen as such. Either there will NOT be a C wave, or it will be so grinding and grueling and overlapping, it wont even seem like a UP move, when it's all said and done.


  2. Thanks Erik. You may be right. I in forming the structurs I tried to fit the fibs into a relatively steep diagonal that would lead into P3. And that is the way it filled out. I like it ending in September as well, but who knows. You are probably right in the fact that it plays out longer and more difficult. One thing I am not discounting is the price action off the bottom and the greed of the bulls to throw this thing (read manipulated market) up, up, up.

  3. I mean, i have NO CLUE.

    It's just that EWT (ABC) and the bobble heads perception of "give us a pullback so we can ALL get up in here"

    seems so similar, it worries me.

    I guess we shall see, whenever we get this pullback LOL..whenever that is.

    Swine flu "officially" in declining phase now.


Keep it civil and respectful to others.