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Thursday, 27 January 2011

Expanding diagonal


We are seeing what looks like a rare EXPANDING DIAGONAL forming in the 5th wave of an impulse wave .Lets look at the bigger chart first.

Looking at that chart , we are still to complete the 5th wave . A look at the 5th wave itself  below::



 Now i remember reading the following important things about expanding diagonals:
    1. There is overlap of waves .
    2. The wave structure is 3-3-3-3-3. 

Now heres why I am confused. I think I can definitely identify 5 waves and not 3 in both bc and what looks like cd( ? ). Am I wrong in identifying the waves. 

The trend-line has been touched today and I am expecting a reversal from here onwards. On top of that the dollar is also seeing a downtrend. Now if this trend-line is broken convincingly downwards , i will have to rethink the whole scenario.

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