When Dow moves above the downward trend line on 28th November, it failed to pull away, it is a false breakout. The current wave is likely to be wave 3 of 5. If so, it will most likely stop at around 7300 follows by wave 4 of 5 rebound to the upper trend line again before ending the wave 5 lower at 7000. But if the current wave break through the lower tend line, it will come down very fast, under this circumstances, Wave 5 is no more a diagonal formation. If the current wave is able to hold above the last low, the last low is still the end of wave A and we are still at the starting of the 10 to 12 months uptrend Wave B.
Tuesday, December 2, 2008
Dow going for Diagonal 5th Wave?
When Dow moves above the downward trend line on 28th November, it failed to pull away, it is a false breakout. The current wave is likely to be wave 3 of 5. If so, it will most likely stop at around 7300 follows by wave 4 of 5 rebound to the upper trend line again before ending the wave 5 lower at 7000. But if the current wave break through the lower tend line, it will come down very fast, under this circumstances, Wave 5 is no more a diagonal formation. If the current wave is able to hold above the last low, the last low is still the end of wave A and we are still at the starting of the 10 to 12 months uptrend Wave B.
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