Hamilton’s E-Wave Analysis

This gets pretty tricky as quite a few possibilities exist for the TSE (does not matter for the overall direction). The idea of a large a-b-c correction has to be discarded on the grounds that the b-wave has 5-waves internally and that just cannot be, so the preference at this stage goes to a 1-2, 1-2 scenario, which makes a lot more sense if you look at the Dow Jones (and the S&P, not shown), on the right. Today’s stellar performance supposedly has something to do with Mr. Trichet, the head of the European central bank, getting on a plane on his way to “solve” the Greek problem – a news bite that nobody yet knows what it means and presumable could be reversed on equally flimsy grounds.

DJIA, TSE

Again, compared to the TSE which does appear to have completed a 5-wave sequence, the same can not readily be said for the Dow Jones Ind. Ave. In my opinion a good case can be made for a missing 5th wave, possible even a 4-5, 4-5 sequence. Compressing a 4-5 into wave 3 (green) requires the assumption of a failure, never a good thing. Also in the DJIA the existence of the triangle wave 4 is by no means all that plausible. Wave 2 would be a zig-zag unless one looks at wave 0ne as a 1-2, 1-2 situation. If a zig-zag we should now anticipate a flat. Given the sharp rise in the past few weeks a flat would probably take the form of a triangle. We will see.

DJIA