Saturday, February 26, 2011

Short Term EW Probabilities

This Post is in continuation of the last post, where EW reference counts and insight were provided for different Time Frames. Here we discuss the Probabilities of the Short term TF in detail.

# 1. If we are trading in the 'c' wave of the larger 'A' :

We may be in the 4th wave of this c or else we have completed the 4th and trading in the 5th of the c.

#(a) If we are still in the 4th ,we may have completed the A up ,B down in a-b-c and going up for the C of this 4th.(Red scenario)

Taking a modest target of wave C equal to wave A ,which was 5599-5177 =420 pts apprx.,Wave C will be 5233+420 =apprx 5650.

Hence this 4th of the c may end at apprx. 5650 level.

The 5th down will start from there to complete the larger A. The indicator will cut above the zero line and then back below zero ,confirming the 5th.

#(b) If we have completed the wave 4th at 5599 ,we may be in the 5th down.This 5th down if modestly targets equality to wave 1 then,(Blue scenario)

wave 1= 6181-5698=apprx. 480 pts.,so
wave 5= 5599-480= apprx 5120 level.This 5th may go further down than 5120 if extended.

On completion of the 5th, we may get a nice positive diversion on the indicator and a wave B up will start to retrace whole of the wave A .

#2. 'Dark Horse' Count :

A Bullish count which is not  being indicated by any other indicators except an oversold Weekly chart , is that we have completed the larger wave A(of the c/4) in a-b-c waves and we are ready to move up in the wave B .

This wave B will retrace the whole wave A ,from 6338 to 5177 and can target the 61.8 / 78.6% fibo levels marked in the chart below at apprx. 5900 and 6100 level.

Keep the probabilities at the back of the mind while trading the short term Positional trade.

1 comment:

AAR VEE said...
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