Luckily at 12:17 in live chat we showed this chart, and, again with great specificity said that any price movement below 2166 (the dotted red line) would mean further downside correction.
|Post from Live Chat at 12:17 PM|
That's because at that point we only had three-waves up in a possible "bear flag". As many of you know by now, once 2166 was broken, the bottom dropped out, literally, and the 2151 lows were taken out. (The above chart also shows how the flats for wave two's rarely work out, and that was another key reason for calling the invalidation point.).
That really leaves only one plausible structure for the potential leading diagonal, and that is shown below.
It 'could be' that today represented an expanded flat for a deeper (b) wave of minute-iii (circle iii). If so, and there is strong upward movement over the next three days, it is possible that the diagonal might be rescued... but we're not holding our breath. Right now, the intent is to be flexible and stay on top of developments as they occur. Why?
The charts below show 'possible' five wave tops in the Dow Jones Industrial Average - made possible by that wave in February we have labeled the Orphan Child Wave - and in the Nasdaq 100 or NQ futures.
|DJIA sitting on Trend Line|
|NQ Futures Five Waves Up?|
We will keep you advised as we go along, but at this point the major message must be re-emphasized. Risk in the market has gone up. This has become more of a professionals market, and not one for amateurs. Unless you are familiar with all of the various possible Elliott Wave structures, it may be difficult to keep tabs on the possibilities during the day. Further, as we said before, it takes many more price points to validate or invalidate a wave than before, and this can be tough on the nerves.
For example, it is now also possible to see the daily September waves as both upside and downside triangles as well as part of a diagonal, or portions of a downward count to be detailed later. The bottom line is whereas the market has the count where it wants it - rife with potentials and no actualities at this point - it does not have us confused: we will simply continue to work each case methodically - as the market presents it, and make the best judgement as to the count as we proceed.
We encourage you to hang in there, and be both patient and flexible. After a period of time, the count almost always clears up. One suggestion might be to keep one's eyes on the overnight futures for a few days to see if any of the diagonal or triangle possibilities invalidate in the overnight.
Until then, the very best to you.