by Avi Gilburt, ElliottWaveTrader.net
Thursday June 6th 2013
This green (4) took us well beyond standard expectations would put it. In fact, it came dangerously close to the top of wave (1), which is not something I ordinarily like to see. Yet, since wave (2) was quite shallow and quick, it does make sense from a price and time alternation standpoint.
When we set up for the drop today, I suggested that you may want to hedge your longs, and follow it down with stops. But, as I said, the longer time frames were pointing to very strong positive divergences, which forced me to maintain my long positions, despite being sick to my stomach at the lows today. I even noted during the day that this feels like just before Thanksgiving of several years ago right before we started a VERY strong rally.
So, for now, it looks like we have completed green (4) and I will be following this move higher to make sure we maintain supports and are following through bullishly in green (5), rather than in alternative yellow (b). For now, it seems we may already be in the larger degree wave i of (5). But, we should still see a wave ii probably next week sometime. So, for those that could not stomach that drop, there will be one more entry opportunity before we make our way much higher.
But, I have to note that I will be watching the 1.00 extension of the first two waves up off this low very carefully to make sure we are not dealing with a larger degree (b) wave. So, we must stay on our toes until that level – the calculation for which is still unknown until waves i and ii complete – is taken out.
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