Advanced Technical Analysis - XBD
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
We are updating our XBD from early August. At the time we suggested that a 4th wave corrective bounce from the lows on 7/19/04 was taking shape that could top somewhere in the "124+/-" area before turning back down in the dominant downtrend toward 110/112 at a minimum. That analysis essentially stays the same. The price action from the 7/19 lows continues to strongly suggest that this entire move up has been a corrective move against the dominant trend (down). Within this 4th wave bounce from the 7/19 lows, prices are tracing out a simple zigzag ABC upward corrective pattern: with the A leg the 7/19 lows to the 7/21 peaks, the B leg the 7/21 peak to the 8/6 lows, and the C leg underway now toward our target area of "124+/-".
To be more specific, if the zigzag forms a classic pattern, then the C wave that started on 8/6 should roughly equal the A wave in price, given a C (and 4th) wave target of $122.93 +/-. The next 5-8 sessions could provide evidence that that 122.93 target is an important pivot by registering hourly Demark trend exhaustion indicators as well as momentum non-confirmations of price action near that peak.
As well, we will want to see a clean "5" waves up from the 8/6 lows into that price area. If all of those conditions present themselves in that 122.93 area, the analysis suggests a downtrend could occur in the XBD and its components. Minimum targets for the final 5th wave off the February peak is in the 110/112 area, with potential for even more price decline should those prices not hold the decline. For now, we will remain patient and await the topping indicators in the 122.93 area that we look for before formulating further analysis.
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