Lately we have been warning you that markets are getting toppy and ready to head south. But what next ? We don't know and don't expect me to tell you there's a crash around the corner. Actually if we look at the chart of Disney it might telling us that no THE TOP is not there yet as it seems to be moving sideways in a large bullish triangle. In other words not much action before one final big push. That would go along with the running cumulative total of daily breadth which is making new high in sync with the NYSE. Usually big tops are showing divergences between the two with the daily breadth weakening before the index.
Disney is definitely a stock to keep your eyes on.
Comments
Will_Wong
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Doesn't the EW rules on Alternation tell us that wave 2 and wave 4 should be proportional in terms of length?
yauger
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@Will Wong, the rule of alternation is a guideline and my understanding of it is that usually if wave 2 is a simple deep ZigZag then one as to expect wave 4 to be a more complex but shallow structure that is likely to make a new high i.e. an expanded flat of a running triangle. And it can be the other way around. In this case I can label wave 1 as an expanded flat if I make the top of wave 1 at the high of 2010. Just keep in mind even if firmly believe markets are patterned and will respect the Elliot rules, I will not hold any patterns with blood in my hands. Labeling is way too subjective.