Dow: Weekend Summary

On the 1st May 2012, a backtest of an 'A-B' line failed to the downside for a 1339point decline. At the beginning of that decline, My-Wave was completely formed to the upside, but the breach of D6 meant a meaningful push for D7 was on, as we had been in a D7 topping formation (the light pink trough). Passing D8 along the way, meant extra momentum for D7, but the weekly bolly bands and D10 combined held price well with the SMI cluster bottoming out. Note how the gold forecasting SMI topping too - this is a displaced SMI, so works the same as my displaced 'D' lines, in reverse of price action, but way in advance. That success at holding and crossing D10 in June 2012 sets up a move to D11 via a retest of D10 as it tops out (forms a trough). Can you see where D10 and D11 sit in respect of price? We are currently backtesting the larger 'A-B' line set up by that last D10 poke but this time My-Wave is very weak - not quite formed to the downside after that gap up but almost. D6 and D7 were taken to the downside in a trend line breach on the 7th November and then D7 was quickly retaken again. Thus far D6 has not and is in fact providing a retest in a bottoming zone. If it can not be retaken in a bottoming zone (a peak), then the topping zone of D7 is likely to take over. If D7 fails, then D8, then D9...... Recall where D10 and D11 are. We have negative divergence at present on both my daily and weekly SMI's and the forecaster is looking for a selling momentum ahead. However, we need price action to shift downhill or else this lot is just wind!

Stepping down into the 8hr bolly environment and we can see the lower order My-Wave is not looking so bearish after the gap up and holding price. D6 sits above as in the bigger picture chart and currently above D1. We are not going to see any cascade downhill unless D1 fails. I have been imagining the route if it does: D1 lurches down to D2; as D3 and D4 are above D2, we then get a pull back to there and then a fall to D5 at 12675. This is 100 points lower than D7 from the last chart. So maybe it keeps falling through D8 and D9, which would be deep into the weekly bolly bands at 12300-12200, before catching its breath. If the fall in May 2012 was 1339 from a bullish My-wave, what will a move from a bearish My-wave provide. Me thinks, D11 or D10 at closer to 10000 is on here but again await proof. The forecaster shows a distinct turn for the worse about 6pm tomorrow GMT, which may see price cut through D1 but initially rising into its Peak from the underside. We shall see.

The trading chart shows a possible diagonal and an initial tremor Friday night. It is very choppy, overlappy and in the right place to be what I want it to be but the short term My-Wave is clearly not in agreement yet. Really need to see the My-Wave turn down and then for price to rise up into the top bolly band with a lower high to be perfect entry. I am too impatient for that here and have started fading short.