MARKET CHARTS WAVE COUNTS |
Weekly chart of the Russell 2000 wave and technical analysis Wave three high occurred in April 1998, wave four low in October 2002. Notice the three waves up from the 1998 low to the 2000 high? From the "B" wave high in 2000 we see a jagged overlapping wave "a" down into the 2001 low, a three wave bounce followed by five waves down into the 2002 low. From the 2002 low the final fifth wave up is one very interesting wave. Fibonacci extension of the distance wave (1) traveled added to the wave (2) low finds wave (3) in the areas of the 2.618 extension at 575. Notice the typical move slightly above the regression channel at the wave three position? Wave four retraced almost 38% of wave three which is a typical relationship and the low almost touched the lower channel trend line which is also a normal pattern. The final wave up from the (4) low has formed a terminal diagonal that is completed or nearly completed at the blow off high Friday achieving the 4.25 extension ratio 720 areas. Looking at the pitchfork using the waves 2,3,4 Fridays high touched the median line, typical of a final thrust wave top. |
Same chart using daily values. Typical Fibonacci extensions from wave "2" target a window of 732 to 743 for the final top and 732 was achieved Friday at 736.25. Notice the heavy blue median line from the 1998 low is just slightly above the high of Friday. Close enough after almost eight years? Odds are this index has topped a major top and below 650 odds are very high it has topped. |
Weekly, Quarterly and Annual support resistance table analysis The first thing that jumps out at me is the annual projected high for 2006 at 746 is only 4 points from the WEEKLY projected high. Last weeks high at 736 puts the 2006 table above the up test but below the pivot. That is a weak position especially if this week's projected low at 718 were to be seen. The first quarter has price near up max. Bottom line, wave, technical and SR table analysis indicate a major top in this index is in place or will be this week. Disclaimer the financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable. The methods Used to form opinions are highly probable and as you follow them for some time you can gain confidence in them. The Market can and will do the unexpected, use the sell stops provided to assist in risk avoidance. Not responsible for errors or omissions Larry Tomlinson Market Charts |
