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Saturday, May 16, 2009

The top chart is the alternative count I mentioned a few days ago. While it's not as likely as the chart below it, I feel that it is important to stay open to all possibilities.

The second chart with Pivot Points, is more in line with what I believe to be happening. Both of these charts have messy counts, but when I stand back, and look at the general wave shapes it seems to make more sense.

To get a perspective of where this second count is in relation to the top chart, find the target B in the lower right hand corner. This B is relative to the B in the top chart near the end of March.

The reason I'm considering the count in the top chart is because one more 100 point run would put us at about 980 which is not far from the 1015 target we have been looking for. This wave would not be able to move more than the third wave because wave one is already longer than wave 3, so it would be limited to about 980. The rhythm has been roughly (up 170) (down 50) (up 100) (down 30) (up 100) (down 50), so one more 100 point run would fit this pattern. The peak of wave 1-C was 875.68. We came very close to over lapping wave 1 on Friday. If an over lap occurs the count will no longer be valid.

To consider all possible patterns no matter how remote; the chart below shows how I would be forced to count the pattern if the market were to plummet from here.

The Bollinger Band is becoming slightly constricted, indicating near term volatility, so Monday may clear a few things up with some extreme action.

I have no prediction, just some possible counts to be on the look out for. But I'm hoping we turn at 900 and head back down.

Your comments are always appreciated.

Analysis presented on this blog has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.

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