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Price did not later exceed price at 5 high. 2nd failed complex M occurs at wave c/2 high. Price did not later exceed c/2 high. These failures observed in the 4 hour are unique at the high of wave 5 in the weekly/monthly periods. Longer term traders (bears) prevented higher price although RSI strength in the shorter 4 hour suggested price would close above both the high of wave 5 and later c/2. Subsequent to wave 5 high price traced wave 1 lower (5 waves), then a. b and c corrective waves higher to wave c/2 high. This was a complete 8 wave cycle subsequent to wave 5. Wave 1 lower in this example is not recognized by most traders as a bonafide trend change. Wave 1 is often the shortest wave because of lesser selling enthusiasm. Wave 2 often and in this instance nearly fully retraced all of wave 1 lower. This is because the market thinks wave 1 lower was just another retrace in an ongoing uptrend. Accordingly bulls see the retrace as another opportunity to go long and join wave 2 expecting price to close above the previous wave 5 high. RSI tracing a complex M above 70 line at wave 5 high strongly suggested later price above wave 5 high and thereby encouraged bulls to go long at wave 1 low. RSI tracing another even more aggressive complex M above both the 70 and 80 lines at wave c/2 confirms bull aggressive buying in wave c/2, still expecting that price would later close higher. A successfully executed bear trap for aggressive bulls. Complex Ms at wave 5 and wave 2 was the bait/invitation to join an uptrend which no longer existed a fact well understood by bears. Price and indicators do not typically trace a peaceful easily understood trend change event. They are deliberately misleading as each side sets traps for the other. The most interesting and informative wave of all in this bear trap scenario was wave 1 subsequent to wave c/2. Wave 1 was stunted and almost non-existent compared to previous wave 1. Why? Bulls were aggressively buying wave 1 as it moved lower still thinking price would move higher. Bulls were mistakenly sure price would later close higher because of RSI complex M above the 70/80 lines at wave c/2. It is important to observe that the majority of the retail equity/commodity markets have no idea what the EW is and more important where price is located in the EW cycle as they enter or exit trades. They are blind to the issues of EW price/indicators location. RSI and MACDs have recently traced their lowest values and a fractal low at wave 3. Lowest values establish most aggressive bear action in this 4 hour cycle. RSI traced a complex W below its 30 line at wave 3, a common event. Is this tracing trustworthy with respect to its prediction of lower price? Yes. Price/indicators have since traced corrective wave 4 (three waves) and later waves 1 and 2 of wave 5. Price is now searching for the low of wave 3 which will be followed by corrective wave 4 then wave 5/5 in the daily/weekly period. Comments; RSI M or W tracings above or below the 70 or 30 lines are not always reliable with respect to their predictions. These tracings at wave high or lows may serve as traps for traders who have no idea where price is located in the relevant EW cycle being traded. Vertical lines mark specific EWs fractal in this and longer periods. Loren ------=_NextPart_001_0010_01CC709F.385DBCC0 Content-Type: text/html; charset=US-ASCII Content-Transfer-Encoding: 7bit  
[Attachment(s) from Loren Morlan included below]

4 HOUR;

1ST  failed complex M occurs at wave 5 high.  Price did not later exceed price at 5 high.  2nd failed complex M occurs at wave c/2 high.  Price did not later exceed c/2 high.  These failures observed in the 4 hour are unique at the high of wave 5 in the weekly/monthly periods.  Longer term traders (bears) prevented higher price although RSI strength in the shorter 4 hour suggested price would close above  both the high of wave 5 and later c/2. 

 

Subsequent to wave 5 high price traced wave 1 lower (5 waves), then a. b and c corrective waves higher to wave c/2 high.  This was a complete  8 wave cycle subsequent to wave 5.  Wave 1 lower in this example is not recognized by most traders as a bonafide trend change.  Wave 1 is often the shortest wave because of lesser selling enthusiasm.  Wave 2 often and in this instance nearly fully retraced all of wave 1 lower.  This is because the market thinks wave 1 lower was just another retrace in an ongoing uptrend.  Accordingly bulls see the retrace as another opportunity to go long and join wave 2 expecting price to close above the previous wave 5 high.   RSI tracing a complex M above 70 line at wave 5 high strongly suggested later price above wave 5 high and thereby encouraged bulls to go long at wave 1 low.   RSI tracing another even more aggressive  complex M above both the 70 and 80 lines at wave c/2 confirms bull aggressive buying in wave c/2, still expecting that price would later close higher.  A successfully executed bear trap for aggressive bulls.  Complex Ms at wave 5 and wave 2 was the bait/invitation to join an uptrend which no longer existed a fact well understood by bears.  Price and indicators do not typically trace a peaceful easily understood trend change event.  They are deliberately misleading as each side sets traps for the other.

 

The most interesting and informative wave of all in this bear trap scenario was wave 1 subsequent to wave c/2.   Wave 1 was stunted and almost non-existent compared to previous wave 1.  Why?  Bulls were aggressively buying wave 1 as it moved lower still thinking price would move higher.  Bulls were mistakenly sure price would later close higher because of RSI complex M above the 70/80 lines at wave c/2.  It is important to observe that the majority of the retail equity/commodity markets have no idea what the EW is and more important where price is located in the EW cycle as they enter or exit trades.  They are blind to the issues of EW price/indicators location.

 

RSI and MACDs have recently traced their lowest values and a fractal low at wave 3.  Lowest values establish most aggressive bear action in this 4 hour cycle.  RSI traced a complex W below its 30 line at wave 3, a common event.  Is this tracing trustworthy with respect to its prediction of lower price?  Yes.  Price/indicators have since traced corrective wave 4 (three waves) and later waves 1 and 2 of wave 5.  Price is now searching for the low of wave 3 which will be followed by corrective wave 4 then wave 5/5 in the daily/weekly period.

 

Comments;

RSI M or W tracings above or below the 70 or 30 lines are not always reliable with respect to their predictions.  These tracings at wave high or lows may serve as traps for traders who have no idea where price is located in the relevant EW cycle being traded. 

 

Vertical lines mark specific EWs fractal in this and longer periods.

 

Loren

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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