Last analysis expected a little more downwards movement towards about 1,705.83 before the resumption of the upwards trend. Price moved lower, 8.73 points below the target, and has not yet confirmed that this is over.
Click on the charts below to enlarge.
At 1,740 intermediate wave (C) would reach equality with intermediate wave (A). At 1,739 minor wave 5 would reach 0.618 the length of minor wave 3.
If price rises through this first target the next target will be used. At 1,849 minor wave 5 would reach equality with minor wave 3.
When minute waves iii and iv within minor wave 5 are complete I will add to the target calculation at minute wave degree, so at that stage it may change.
Minor wave 1 lasted a Fibonacci 21 days, minor wave 2 lasted a Fibonacci 8 days, minor wave 3 has no Fibonacci duration at 98 days, and minor wave 4 lasted 22 days, just one day longer than a Fibonacci 21.
Minor wave 5 may not exhibit a Fibonacci time relationship. The next possibility may be the 29th of October (give or take two days either side of this date) where minor wave 5 would have lasted a Fibonacci 89 days. This is a date to look out for, but cannot be relied upon because Fibonacci time relationships do not occur often enough to be reliable.
Keep drawing the wider parallel channels from the monthly chart and copy them over to the daily chart.
If minuette wave (iv) is over here then both minuette waves (ii) and (iv) lasted 18 hours. They are perfectly in proportion and have perfect alternation between them.
There is no Fibonacci ratio between subminuette waves a and c within the zigzag of minuette wave (iv).
At 1,760 minuette wave (v) would reach 0.618 the length of minuette wave (iii). This target fits with the second target on the daily chart, but not the first.
Draw a best fit parallel channel about minuette wave (iv). When this channel is clearly breached by upwards movement I would have confidence that minuette wave (iv) is over and minuette wave (v) has begun.
While price remains within the channel the possibility of more downwards movement will remain.
Minuette wave (iv) may not move into minuette wave (i) price territory. This wave count is invalidated with movement below 1,641.18.
Alternate Daily Wave Count.
There are two structural possibilities for minor wave 5. The main wave count looks at the most likely structure of an impulse. This alternate will consider the less likely possibility of an ending diagonal.
The ending diagonal may be contracting. All the subwaves must subdivide into zigzags, and the fourth wave must overlap back into first wave price territory.
Minute wave i may be recently completed. Downwards movement may be the start of minute wave ii.
Second waves within diagonals are commonly between 0.66 to 0.81 the length of the first wave. This gives us a target zone between 1,618 and 1,593. I would expect downwards movement to find support at the lower edge of the blue parallel channel (or slightly above this line).
Minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 1,560.33.
Got it. But as Minor 5 complete, isn’t MACD likely to rise to new highs for this move?
When you say divergence on the daily chart remains strong, which two points in time are you comparing? I was looking at the fact that the recent high in price did not result in a new MACD high, but if a new high is coming, it looks to me that MACD will confirm.
I’m referring to the highs labeled minor 3 and minuette i and now the most recent all time high.
All three of those highs show a line of divergence with MACD, this is why I have that thick lavendar line on MACD, to show the divergence.
Recently, you have been speaking about the divergence in MACD as being significant in spotting a top in the market. It seems that any developing divergence has been worked through, and that if the markets push to new highs, MACD will confirm (at least on the daily charts; on a weekly basis, it looks like there is indeed divergence).
I was just wondering what your thoughts on this are, and if a lack of divergence at this point would suggest a continued move higher for some time.
The divergence on the daily chart remains strong…. no new MACD highs yet…. so I’m not sure what you mean by divergence has been worked through?
There is no divergence on the monthly chart between the October 2007 high and current highs, but there remains divergence between the September 2000 high and current highs. September 2000 is the start of this huge correction, so that divergence is significant.
If this last upwards wave we are expecting increases in momentum and there is no longer divergence on the daily chart then the alternate monthly, which is very bullish, will be correct.