The market detective is a Chartered Market Technician (CMT). He uses technical analysis to identify market turning points and opportunities. He is primarily an Elliottician, he uses the Elliott wave principle and Fibonacci ratio analysis to uncover clues about the direction of the market. He uses other forms of technical analysis to corroborate his findings in such a way as to assign a probability factor to them.
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12/11/200812:23 AM Pacific We completed the additional wave down I was looking for last night, tagged 884 again and bounced, but it didn’t turn into a rally. Instead, price continues to meander sideways. The most common sideways pattern is a triangle, and we could be a barrier triangle as indicated here. One supporting piece of evidence is that the most common way to measure the distance price travels when it breaks out of a triangle, is to project the width of the base up. If I do that, it measures to 950 which is also a .618 extension of waves (1) through (3). That is good corroboration. The other way it works is that triangles are most commonly found in 4 th waves. Price shouldn’t break below 884 if it is a triangle. Price should tag the trend line above and turn back down for one more trip to the base line, or close to it. A small breach out the top of the trend line (wave d) is normal. The 880 baseline should hold again, and then
Transcript
12/11/200812:23 AM Pacific
We completed the additional wave down I was looking for last night, tagged 884 again and bounced, but it didn’t turn into a rally. Instead, price continues to meander sideways. The most common sideways pattern is a triangle, and we could be a barrier triangle as indicated here. One supporting piece of evidence is that the most common way to measure the distance price travels when it breaks out of a triangle, is to project the width of the base up. If I do that, it measures to 950 which is also a .618 extension of waves (1) through (3). That is good corroboration. The other way it works is that triangles are most commonly found in 4th waves.
Price shouldn’t break below 884 if it is a triangle. Price should tag the trend line above and turn back down for one more trip to the base line, or close to it. A small breach out the top of the trend line (wave d) is normal. The 880 baseline should hold again, and then
12/11/200812:23 AM Pacific
turn up in earnest. If price breaks out of the trend line at d, then it was probably a zigzag (a-b-c) after all, and the target is still 950. If 884 is broken on the downside the triangle thesis is wrong. In that case it is probably an extension of the a-b-c, and I look for a turn between 874 and 878. If 874 is broken on the downside, the wave 4 thesis is probably wrong. I have an alternate thesis on the back burner, in case that happens (and it is still bullish), but I believe the 4th wave thesis is the most probable, and the 4th wave is looking like a triangle. TMD/DW The market detective provides personal market opinion based on sound technical analysis and research. However, no warranty is given or implied as to its true reliability. The market detective will make errors and mistakes. The market detective is not an investment adviser and is not making recommendations to buy, sell, or place orders relating to the futures contracts, ETFs, or stocks that he writes about. The responsibility for decisions made from information contained in this service are solely that of the individual subscriber. The individual must fully research and make his/her own decisions before acting on any information provided by the market detective. The market detective assumes no responsibility for subscriber investment or trading results.
