ETN, Eaton Corp.

Eaton Corp. is a globalized diversified power management company. We suspect the reader does not own it. Notwithstanding that, the chart is symptomatic of so many others that is is worth looking at to underline the big picture.

etn jan 2012

The picture must be familiar by now, it is the basic A down, B up and now C down that we have witnessed with so many different stocks. Normally the C wave drops below the start of the B, but sometimes symmetry is maintained , which, if it happened, would argue for a low around $18 or so. This B-wave counter-trend rally to a slight new high is text-book EW, the vertical distance being equal for both up-legs. In detail;

etn s jan 2012

Wave 2 should be nearing completion any day now if not already. Next is wave 3 which normally is the most devastating. Notice that wave 2 is also text-book even if the retracement is relatively large which may have more to do with idiotically low rates and  intervention in one form of another , than with real optimism.