Change-In-Trend

with Anthony, ZigZag & Platy

Wave 5 Failure

The S&P 500 minor wave 5 failed to eventuate. However, the Dow Jones did make a marginal new low. The Dow Jones had previously posted in early May a new high and now a marginal new low, whilst the S&P has made a lower high in early May followed by a slightly higher low.

So whilst we have a technical wave 5 failure, the Dow Jones wave 5 should confirm that the S&P500 has also posted its wave 5 low and now we are due to move up into a major wave 4, now that major wave 3 is complete.

In yesterdays post i said “The downside target now remains 1298-1291 with the ideal low around 1291 for a retest of 21 May lows.” Today we reached that target posting a low of 1296.53 triggering my order to close out my current short position and flip the position to long. This was a target also highlighted by the volatility bands for the S&P500 .

A refresh of the larger wave count is now showing a target of around the 1371-1378 region completing a major wave 4 high. This target is in confluence with longer term geometric support (now resistance), Gann angle from the March top, the downward sloping Andrews Pitchfork and also a cyclical time progression high shown by the Natural Cycle.

The Natural Cycle is supportive of further upside into late May and major wave 4 completion.

Today’s target is 1332-1333 after reaching yesterdays downside target.

There is also bullish seasonality for the next 2 days into Memorial Day

Chart Courtesy of: SentimenTrader.com

Yesterday i also mentioned “we could also see  a higher dollar today as equities move down into the low as the dollar hugs the upper resistance band” and i posted a target of 22.74 using the volatility bands, today you can see that that upside target was reached at 22.76. Weakness is now expected in the dollar which is supportive of near term higher equities prices.

For the next couple of days i would like to see higher prices confirm the roadmap set out above. So for now its sit back and let the position run.

Anthony

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9 comments on “Wave 5 Failure

  1. Anthony Tudela
    May 26, 2012

    Anon, yes i do have a time and price target which will be revealed as the weeks unfold.

  2. stock0711
    May 26, 2012

    Thanks for update

  3. Anonymous
    May 25, 2012

    Dear Mr Tedula,
    Do you have a target in price and time at this time for minor wave 5 low to complete
    WAVE 4 before rallying into WAVE 5 ? Thanks

  4. Jason
    May 24, 2012

    Thank you for such a quick and detailed reply!

  5. Anthony Tudela
    May 24, 2012

    Jason very good questions and thanks for the feedback.

    In traditional Elliott Wave yes it would. However the technique that i use is concerned more about the energy of a move or ripples and is much simpler than EW.

    Very simply it just consists of 5 impulse waves within each leg, whether that is 5 mini waves within a larger single wave or 5 major waves. There are no rules about breaching the prior wave 1. The only rules are that you end on the 5th wave, which so far since the March top weve only completed down to major wave 3 which means major waves 4 and 5 are ahead of us, generally this means we still need a major 4 up and major 5 down below major wave 3.

    Its more of a guide than a precise science and i find that more often that not it is superior to the intricacies that people get caught up with using EW. Probably best that i show you on a chart in tomorrows post of what im talking about.

    No, that’s just the potential upside target for today, ill be holding until we reach the major wave 4 in the 1370-1375 area. But like i said 1332-1333 would probably mark the top of a minor wave as we head up into the next major wave. Then we will hit the lower boundary and that will mark a higher low in the mini 5 wave up etc etc.

    You could get cute and trade in and out of the waves heading up but its better just to sit back and let the position run as a swing trader.

  6. Jason
    May 24, 2012

    Also, reaching your target of 1332-33 would you initiate another short position?

  7. Jason
    May 24, 2012

    Hi Anthony,
    I think your work is excellent, very informative and extremely well thought out. A question as a relative newby to wave theory etc.: Your 4 high would be above your 1 low. Doesn’t that break an EW rule?
    Jason

  8. Anthony Tudela
    May 24, 2012

    Thanks Doc

  9. drrock
    May 24, 2012

    well done. keep up the great work.

Comments are closed.

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