How to define pattern position
From the Nov. high, bonds clearly made an impulsive decline into the Dec.
low. From the Dec. low, bonds clearly made a corrective rally into the Feb.
high. From the Feb. high, the decline to the March low was clearly
impulsive. What type of pattern should the rally from the March 21 low be?
It depends.
Impulse-correction-impulse could be an ABC correction or part of a
more complex correction. It could also be waves 1-2-1:3 of a larger degree
bearish impulse trend. It depends on what we would label the Nov. high.
If we considered the Nov. high the end of a multi-year bull trend, March
should not be the end of an ABC correction. If we though the Nov. high
was only temporary, March could be the completion of an ABC correction.
If we have no strong opinion one way or the other about the Nov. high,
how could the pattern of the advance from the March low help us to
identify the larger degree pattern/trend position?
If the rally clearly unfolds in an ABC or other more complex corrective
pattern, the larger degree trend is probably bearish and will eventually
make new lows well below the March low.
If the rally clearly unfolds in an impulse trend, March should be the end
of an ABC corrective decline from the Nov. high or the impulse may be a
Wave-A which is part of a larger degree correction.
Let’s take a look at the 60-minute data from the March low into mid-
April.
Is the pattern of the data above clearly impulsive or corrective? From
my point of view, it is not clearly one or the other. Let’s put the most
obvious labels on, those that would meet all of the EW rules and
guidelines and see what are the potentials.
Read next >>> Impulsive or corrective?
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