Bears' Last Stand for Elliott Wave Impulse Pattern Down
In the context of a larger corrective pattern, I have anticipated and tracked the move down from 05/02/2011 as an Elliott wave impulse pattern (5 waves). There have been a few options available for wave 4 (and 5) under this context until recently, but now I believe that only one option remains. A failure of this remaining pattern, which will occur if price rises above the wave 4 rule based limit, will result in the negation of an impulse wave down hypothesis.
Where other options, which are now negated, suggested that wave 5 down already started, this final option implies that wave 5 has not started yet. The 4th wave pattern remaining is a complex Flat pattern, and I propose it is Running Flat or an Expanded Flat.
A Running Flat, although uncommon, would fit nicely into the context of the larger trend down and negative forces at work. It simply means that forces are skewing price down and wave c will not match or exceed the level of wave a. Notice that price is currently stalled at the intersection of the lower deviation of the regression trend channel measured from wave 1 to wave 3, and the upper deviation of the regression trend channel measured from wave a to b. This is also the .382 Fibonacci retrace level. It is my opinion that this is a good area for a Running Flat wave c reversal.
Since wave b extended lower than wave a, the second option is an Expanded Flat. An Expanded Flat could take price close to the .618 retrace level which happens to roughly coincide with the wave 4 rule break level (wave 4 should not enter price territory of wave 1).
If price moves solidly into wave 1 territory then this hypothesis is invalid. If this hypothesis is correct, then price will reverse between here and 1260 and move lower than the 10/04/2011 low. A Fibonacci measured target would be the low 1000s.
TMD
Posted by TheMarketDetective at 10/11/2011 1:23 PM 
Categories: Technical Analysis, Fibonacci Analysis, Elliott Wave Principle, Fibonacci time, Futures
Categories: Technical Analysis, Fibonacci Analysis, Elliott Wave Principle, Fibonacci time, Futures
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