1 - Overall price action suggests an incomplete 5-wave impulse with Elliott Wave alternation rules giving way to a complex Wave-IV consolidation with support expected at 4104.70, compared to a simpler Wave-II which occurred between 04-2010 and 10 2011; A resultant Wave-V completion remains pending
2 - Predictive/Forecasting Model eyes ONE pending targets, namely TG-Hix = 5255.11 and a WL level suggesting high-probability reversal level, namely WL = 5859.51
3 - Interim support corresponds to alignment of both a structural level where Intermediate Wave 4 (circled) defined its residence, as well as a quantitative target generated by the same Predictive/Forecasting Model as that which generated above qualitative levels, TG-Hix and WL
A QUICK NOTE ON RSI:
I often receive comments and suggestions about RSI, pointing to so-called divergences, which are typically referred to as "bullish" or "bearish" divergences - I will be short on this, as I have hammered this topics in public lessons several times over the years, but the author had originally suggested that BEARISH divergences in RSI (RED in the RSI field) are commonly associated with BULLISH trending markets, and not with declining markets, as many junior traders tend to perpetrate the same misstatement from misinformed tutors.
If you need to use RSI for a market expected to rally, look instead for POSITIVE (neither bullish, nor bearish) divergences (GREEN in the RSI field), where the origin of the green line imposes a solid support, which price will seldom transgress (as is consistently shown in this case) - The analogy I teach is that of a "shovel", where the origin of the green line is the handle, and the tip is the shovel, propping price up and above to higher height, in a situation where price carves a HIGHER-low against a LOWER-low in RSI ... If confused, just ask me for more examples, or feel free to post some suggestions here or in another appropriate chart ... Kapish?
The inverse is true, where a NEGATIVE divergence is price, where I use the "hammer" analogy, has the handle defining a level which price will not transgress, where the right-end of the RSI (not shown in this chart, since there is no downtrend defined as of yet) would rise at a HIGHER-high, compared to a LOWER-high in price, thus giving the impression of hammering the price further DOWN.
The ORANGE lines are convergent lines, and they simply have no "telling" as to the direction, strength and extent of subsequent price action.
Hope this helps in your own analyses.
David Alcindor, CMT Affiliate #227974
- Alias: 4xForecaster