Sometimes you just start questioning your wave count. I found in times like that is to just stay with it till it absolutely crashes in on you. More often then not you will find your right.

Well, the market broke out of trendline on daily chart. It means a new pattern is up, which one tho. I say it is an -c- wave, but what troubles me is that when the market breaks trendline. It either has an hook formed inside the channel before break out or it consolidates at trendline or forms an hook at the trendline. In all the later cases would mean the fourth wave is finished. I will stay true to my previous labeling, yet.

If an corrective wave was up in channel and breaks channel. It means the market has turned down. Does not mean the labeling is finished for upward, but that the corrective pattern is basicly over.

One more thing according to EW. Wave -4- never goes into wave -1-, or only very briefly. I find it seldom does if ever. Therefore, we can not expect this market to go above 1372.25 at all. Or rather until it finishes its fifth wave or this pattern. And wave -4- does not go very often close to wave -1-.

Remember that fractals or pointed data is critical to wave thinking. Bill Williams says every fractal is an wave count. I rather say you can use them to target and use them to look for an wave correction or count to be made when the market returns to go pass them in most cases. That is when in congestion. The farther the data is away from present data the less significance or bearing it has on support or resistances.
If the data fits conviently on your chart the fractal matters.

I formed a channel from a smaller chart and transferred it over and this is the route I expect it to take. Will have to wait and see and it seems not to have much getty up and go, at least yet.

To figure minimum failure points weather they be an -c- or -5- wave is .618 of the previous wave count.

One more thing. This morning I gave a quick update. In the future if the data goes beyond the .618 retracement quickly or in one bar. Immediately prepare to change your position. This is the first sign that next support is up. The market should move slowly and methodically most of the time into turn points of correction. Except on wave -c- which can sometimes in smaller frames be very quick in appearance.

Will see what tomorrow brings.

charleydan
www.sillywaves.blogspot.com