Analysis for August 21st, 2014
DJIA Index
Bulls continue forming the structure of an impulse wave C inside an ascending zigzag of wave (B). However, the current wave structure is becoming more and more unstable. The fact is that there is no doubt that the nature of this wave is impulse, but it’s quite difficult to understand right now whether it is wave C or an extension inside the third of wave of this new ascending impulse. That’s exactly why it’s better not to risk and stay out of the market until the situation becomes clearer.
Crude Oil
Bears continue pushing Oil towards new lows. If we base on the principle, “show must go on”, then after a horizontal triangle pattern inside wave 4, the price may form a very promising wedge pattern inside the first one. Consequently, after finishing a correction in one form or another inside the second wave, the market may move downwards fast inside the third one, which is $90 per barrel of Light Sweet or even lower.
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