When looking at the 30 minute chart, things are evolving pretty quickly for our wave ii correction. Yesterdays action told us quite a bit about where we are headed in the short term. We broke 2 important areas of support, first the little neckline from the H&S and the bottom red rail of the triangle halfway pattern that I posted yesterday. What this tells us is that we have started, in earnest, the next leg down. This is where it starts to get interesting. With the breakout of the H&S NL and the triangle, we can now start to look for the next bottom area. The triangle halfway pattern measures out to 356, this would give us a parallel trend channel. The triangle halfway pattern is also telling that this correction is more than half over now. If for some reason we don’t make it all the way down to the triangle PO at 356 that would set up the possibility of a falling wedge formation. One more note on the 30 minute chart. The vertical purple line shows the momentum low that may have been put in yesterday. This doesn’t mean the price low is in. This is the area where we can look for a possible positive divergence to set up, a lower low for price and a higher low for the RSI.
hui-30.pnghuisee.png
Putting all our support zones together we come up with a support area for the wave ii correction. The top of the range comes in at 375 the 50% correction of wave i. 2nd, the triangle halfway pattern that measures down to 356 and the 62% retrace of wave i up comes in at 353, the bottom of our support band. So our band of support is now 375 top and 353 bottom. It will be interesting to see how this unfolds over the next 5 days or so.
Peace…Rambus
huido.png Daily, big patterns support zones, 380 and 360. hui15.png