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Attached is a weekly chart of bonds (all sessions) from which one can
observe:
1) The decline from the October highs is impulsive rather than corrective
because the Dec97 Wave 1 PH was clearly violated
2) The price objectives based on waves (1) and (2) have all been satisfied
for wave (3)
3) The price objective for wave 5.(3) has been satisfied on daily chart
4) The first regression channel encompassing waves (1)-(2) was clearly
violated.
5) The second regression channel based on wave (3) is much steeper which is
typical of a wave 3
6) A wave 4 will generally violate the second channel providing the first
indication that w 3 has ended. If wave 4 reaches minimum of 38% it will
roughly touch the bottom of the first channel
7) A wave 5 will generally retest the top of the second channel
As for the current 60 minute chart, a post Fed announcement decline to
113^28-31 followed by a rally through the 115^04 high would convince me that
a significant wave (4) rally is underway.
Earl
----- Original Message -----
From: swp <swp@xxxxxxxxxx>
To: Tom Alexander <gta3@xxxxxxxxxxxxx>
Cc: <realtraders@xxxxxxxxxxxx>
Sent: Wednesday, June 30, 1999 9:40 AM
Subject: Re: bonds
> Tom -
>
> I have gone with a five wave count. The reason is because the night
> session, following the 113-09 low saw bonds reach 113-05. Using that,
> you do not get that funky three wave structure for wave-A and it becomes
> easier to label wave-1 up to 114-07. Then, 50-62% retrace is I
> 114-04/113-20.
>
> Interesting sidelight though is that I have leaned to the idea that
> 113-25 ended a three wave drop from the highs. If that is correct, then
> you have the following possibilities:
>
> 1) 116-08/113-05 was wave-5 or wave-i of wave-5. That would make a-b-c
> look more correct here. I do not like any counts using this as wave-5
> since it implies very short lived 4th wave compared to other waves in
> the drop since last October.
>
> 2) Wave-3 ended at 113-05. This fits in with five wave count up from
> 113-05 which could be wave-A in a zigzag still developing.
>
> 3) Wave-3 bottomed at 113-25, and at 115-04 completed a three wave
> irregular correction. If drop holds 114-04/113-20, then would lean to
> this being x-wave with wave-4 continuing longer as a double three.
>
> Just some further thoughts....
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