aarc's  Instablog

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  • Ready .. Get Set ... 0 comments
    Nov 18, 2011 5:48 AM

    Too many distractions for the US stock markets with the Eurozone Dept Crisis still active and the Occupy Whatever Movement closing in on NYSE yesterday.

    So far, the potential Double Combination of Flat and Zigzag for the NQ as illustrated on the last post did not happen but instead a possible Double Flat Combination is the highest probability pattern to date:

    -   img38.imagefra.me/i5bi/aarc/12xv_ee4_ubk...

    I use Compq this time for intraday wavecount to reduce the noise on price structures.

    The W and Y waves for a double flat combination usually consume more or less the same amount of time.

    For reference purposes;  a hard break below the channels outlined will be the initial warning of a possible meltdown and a break below 2518 will make it more than 50% probability a 1-2-3 instead of an a-b-c down measured from the X-wave top.

    For short-term swing traders and trend traders;  they are now monitoring whether the major indexes will test and break or test and bounce off their daily 50ma or their daily 50ema supports. 

    Pick your poison.

    EOD Update:

    Not a good day nor a bad one.

    Compq i-ii-iii-iv-v has a v-th wave nominal run rate of 2555 to 2545 and an extended target of 2532.  Therefore, IF Compq breaks hard below 2532, then the probability of a spiral meltdown will start to become higher.  A break below 2518 will increase the probability of a 1-2-3 run down more than 50% measured from the X-wave on the above chart illustration.

    Otherwise, a reversal in Monday should be expected if not a gap up if something extra-ordinarily good news happens over the weekend or early morning Monday.

    For those not used to intraday chart;  a better buying strategy is to use stop buy order(s) above today's high and perhaps use today's low as a stop loss or use a level below 2518 as a reference stop loss.

    Nominal target for a 1-2-3 run up is 2858 at current form thus a reversal on Monday will provide a high reward vs. risk ratio if the trade proved successful.  That is what trading using technical analysis is for:  Rewards should be considerably larger than the risks involved when executed properly.

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