I was staring at that damn Dollar chart and in an epiphany something occurred to me which should have been obvious as we first dropped and bounced back today:
No, I didn’t see the Holy Mary in my Schnitzel – sorry – I think what we might be painting on the Dollar chart is called an ‘ending diagonal’ in EWT. Based on the rules it’s also still incomplete – so please bear in mind that we could fall through the support line tomorrow and it would completely ruin this scenario. Anyway, from our bible a quick excerpt for the noobs:
An ending diagonal occurs primarily in the fifth wave position at times when the preceding move has gone ‘too far too fast’, as Elliott put it. A very small percentage of diagonals appear in the C-wave position of A-B-C formations. In double or triple three cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.
A contracting diagonal takes a wedge shape within to converging lines (check).
The rules also state that:
- A diagonal always subdivides into five waves.
- An ending diagonal always appears as wave 5 of an impulse or wave C of a zigzag or flat.
- Waves 1, 2, 3, 4, and 5 of an ending diagonal always subdivide into zigzags.
- Wave 2 never goes beyond the start of wave 1.
- Wave 3 never goes beyond the end of wave1.
- Wave 4 never moves beyond the end of wave 2.
- wave 4 always end within the price territory of wave 1.
- With an contracting diagonal wave 3 is always shorter than wave 1, wave 4 is always shorter than wave 2, and wave 5 is always shorter than wave 3.
- In a contracting diagonal wave 5 usually ends beyond the end of wave 3 (failure to do so is called a truncation).
- In an contracting diagonal wave 5 usually ends at or slightly beyond a line that connects the ends of waves 1 and 3. (Ending beyond that line is called a throw over).
If all that’s too academic to you – here’s a picture:
So, there you have it – everything you always wanted to know about a wedgie and never dared to ask
Yummie… Now, if we’re going to get to tap that hot wedgie is of course another question. The first zigzag in this supposed ending diagonal is not exactly clean and one could count it as a motive, but I’m not going to get completely purist as everything else seems to line up nicely right now.
But even if this is what’s happening we are not done yet – according to the count we only completed wave 3 and should now push up into wave 4 – probably tomorrow. Then one final drop – perhaps a throw over – and we’re off to the races. That’s the theory and I admit it’s a bit of Mole Mental Masturbation – the three lethal Ms.
What this could mean for equities would be that Soylent Green might still have a snowball’s chance in hell of playing out. So, keep one eye on the Dollar and the other on that 78.6% fib line – which should make you look like this:
BTW, we are at Mole’s Shitstorm Level Yellow right now – get your act together and start posting