Summary for Week Ending 22nd October 2005
This past week has unfolded as I expected, with consolidation happening for most of the week and no new lows coming in but it was a wild ride none the less.
The most surprising feature of the past week as been the wide range volatility that we saw on Wednesday and Thursday which provided a very short term roller coaster for anyone who was trying trade in or out of it. The washing machine conditions did little except keep the market within a specific range which was above the low of the previous week and below the 50% retracement level that was highlighted on last weeks chart. With the market as it stands it is still working through what is still my expectation for the next few weeks. I said that I expected the corrective phase to be about 12-13 days long and we have already soaked up half of this distance in time.
So where can this all go pear-shaped? As it stands things are still on plan. If the market does slide this week to a new low then obviously the 12-13 day correction is off the table, and we would be looking at a high speed decline to the next level of support which is around the 1136 area. From a pattern perspective we have already had 3 waves on correction so this would satisfy the Elliott side of the corrective pattern requirement, but the time factor is the one that is yet to be confirmed so I'm still counting on some more hollow bullishness to come into the market and drag the market to the 50% retracement level. If we do see this come in this week or early next week then as I said before the market will be in a very precarious position and Volume should be a hint from which to form an opinion.
This weeks chart is identical to last weeks, but I have added the Time Ranges which at 100% come out around the 15th Nov if we are to see 100% price and time squaring off.
|
