GKP

Hi F4T,

I think we're in agreement. The bounce from 195p looks like a wave B up of 2 down to me so I'm also looking towards 187p.

Cheers

Hi SE,

There are always option with wave counts so they should always carry a caveat emptor.

IN GKP's case the whole move from 139.25p to 260p and back to 161p is bizarre and very difficult from an EWT perspective. What seems to have clarified things is the move up from 161p to 228p which looks a lot like 5 waves (and, indeed, all the subwaves are perfect in respect of the textbook retracements). If that's the case then an initial 5 wave sequence in a trend change cannot be the last move in that direction.

As I've posted previously, it's now my belief that 161p was probably the bottom (I did earlier think that, given the 139p to 260p there could be a retrace to 139p or lower). Whether the bounce off 195p holds or not I'm not sure.

A 50% retrace is enough for a wave 2 down but what's throwing me for now is that the dip to 195p is not reflected in the hourly chart as the mid-price only went to about 197/8p. This means that the hourly chart has a less than 50% retrace which is usually not enough for a wave 2. For these reasons I still think it's possible that a retrace to 187p may still be possible. Whether it could go beyond that in the event of a large general market correction we'll probably only know with hindsight I'm afraid.

Things are getting interesting again. Lovely dark cloud cover yesterday after the indices finally submitted to a much needed retrace, which is not over yet. Once S&P broke 1505 the rest was just exhaustion.

With GKP we back tested the neckline of the H&S on the last rise from 195 spike down (50% retrace of 161 move) and now everything points nicely down. First target still 187 and rising long term support is now in the 169/170 area so traders can forget about 161 IMO. It should be history.

If long term support at 170 does break then so will 161 and I would expect at least 141, but I don't think that will happen unless the CC gloes very tits up.

So, in summary, this is a sell down to minimum 187 and a strong buy at 170 if we get there. I think we might just do that as I see the indices giving back some more and GKP is always weak in that environment.

Cheers
F4T

Jackozy - If the DOW tanks and takes the markets with it - how does this impact your Wave count on GKP? Does this bring 161 back into play?

We agree again F4T!

If you believe in the fractal nature of price charts then they should appear on any timeframe.

Perhaps of more relevance is where in the chart they appear. For me, an H&S needs to be at the top of an uptrend and vice versa for an inverse H&S. That could be the top (or bottom) of a trend on the 5 min chart or the weekly chart, just as long as it's not in the middle of a trend. In that respect, they should be near important supports or resistances (on the relevant timeframe) or have clear divergences at the heads.

Eric,

not sure what the textbook answer is but ot my mind the H&S pattern, by its nature can fit any time frame.

Head is a higher high as the bulls get a little excited, profit taking then occurs at the new high and when the bulls fail to make another higher high traders bail out happily and the bears take control. It is one of the most reliable chart patterns being greed followed by panic selling once it is clear that the high will not be exceeded. This could be just as common on a 5 minute chart as a monthly one IMO.

I am sure there are other opinions though.

F4T