But now what I wanted to do different was to present to you and ALTERNATE wave count within this update. Changing wave counts mid-trade is not usual but in this case, I think it MUST be considered. Of course, if you have followed my posts, you know I ALWAYS advocate having an alternate scenario if possible to follow just in case I'm wrong. ALWAYS be prepared. As they say, "Opportunity comes to those who are prepared for it".
So in this ALTERNATE WAVE COUNT, I'm disregarding the patterns in the previous scenario. Here is the chart of that scenario:
In the main chart, you can see that I have the previous up move now labeled as wave (1) of a 5-wave wave (C). And the current decline as the wave (2) of (C). Yes, this means that the much anticipated wave (C) is already underway and we are seeing the retrace of wave (1) now. That also means that the ending of wave (2) will see the beginning of the wave (3) of (C)! This is why I felt I MUST present this alternate count because it correct, a wave (3) is coming soon!
But first to deal with the progress of wave (2). It's not over. It may not hit the MAJOR SR Structure before reversing to complete a wave B of wave (2). Remember, that line that represents the structure IS NOT a fixed level but rather represents an AREA of support. If it does now reverse, it may get back up to the 1.54700 area where if it stalls there would become the right shoulder of a possible pattern and this would complete the wave B. IF it does this and the pattern is set, then a price decline down to the .886 fib level would be about the target of the pattern.This wold also complete the pattern. And it's in the Goldilocks reversal zone. ***NOTE*** the . level also happens to be the target for and pattern on the Scenario #2 chart above (in blue). More confluence to support this alternate wave count.
Wave 2's do have a tendency towards retracing almost all of wave 1's and when this happens, the ensuing wave 3 is usually pretty long. Something to think about.
MY TRADE PLAN
I've already taken 50% of my SHORT positions off and leaving the other 50% to run. I am moving my stops to just above the minor sr structure level you see on the chart as that is where the shoulder of the should form. You might ask if I am expecting such a retrace, why I would choose to leave some open SHORT positions? Well, because there's no guarantee it will do that. It may just do a sideways consolidation wave B here and then drop down. So if it does, I am ready. I also do not want to use a trailing stop in this case because I want to allow for the possibility of the forming and then heading down without being stopped out before hand.