Dow

Hi Amo,

If I may (correct me if I'm wrong!)...

That was actually the breakout point for a 500 pt move which subsequently proved support on a backtest. In addition, the 200MA is there, a 38.2% Fib is there and the trendline is close by. So basically there's a lot of support in that area.

What that also means, of course, is that if it fails then it becomes stern resistance and a big down move would be likely.

Hi Remo.

Why is the horizontal support line in the circled area of such significance when there is only one past touch point?

Thanks
Amo

I would not be placing any longs near the trend line now. Its too close for my liking.
I will how ever have longs ready at 12980 with a 40 point stop during market hours only.
The reason being you have 2 strong supports near together. The 200sma is currently at 12987 and the breakout point.
Please remember these trades are for first attempts only ..Once it bounces then a second attempt will weaken the support.
If it does bounce of that level then you should also be aware of a possible head and shoulders forming.

If it does finish below 12980 then a deeper correction will be ahead. Hence the importance of that level.

DYOR
remo

Jackozy I really have to thank you. For some reason, I know not why, I have always thought of triangles and diagonals as corrective waves so thanks for kicking my butt and waking me up. How could I be so thick Always the sub-wave 4 going lower than wave 1 has beedn a problem - until now!
I will now take a fresh look at Elliott's with a smile on my face instead of a frown.
From the brief bit of reading I have managed since reading your post it would appear the count of the sub-waves will probably determine the name of the diagonal/triangle/whatever. I'll get back to ya when I've polished the old brain-cells.

Couple of options for you:



dl.dropbox.com/u/20815047/Dowwaves.gif

and:



dl.dropbox.com/u/20815047/Dowwaves1.gif

Ocean,

that's how I see it but - yese, there's always a but huh - show me the labeling for the sub-waves of your wave lll. This is the area I cannot fathom??? How do you get the wave 4 to not cross the wave 1????
Maybe we're on the wrong track completely huh??