I thought of that when I drew the 3 and almost changed it once I published the graph. What I was going for was an Irregular “ABC” in Wave 4 instead of making Wave 4 just be one bar, though had I bumped the #3 up just a bit, it would have had a valid count.

Also, I’m describing this as the “Three Push” bearish reversal pattern, which is similar to EW but not exactly the same. The Three Push has all 3 ‘waves’ be roughly equal and does so on a negative momentum divergence. It’s usually shorter than a few days so this is longer than an average “Three Push”.

I created a detailed post entitled “How I Set-Up My Charts” to shed light on my indicators.

The “Three Push” is indeed a reversal pattern but it’s mainly of my own observation – I’ve never seen it in any TA textbook. The expectation is that it is similar to an Elliott 5-wave impulse but not exactly.

The “Three Push” – unlike Elliott – has all three waves occur compressed and are roughly equal in price (unlike EWT where Wave 3 is expected to be the longest). It often occurs on a triple-swing negative momentum divergence.

It’s almost like the bulls are giving it all they can (for three impulses) and then they give up.

Nice site. I used to do a hedged strategy where I’d have to have an equal amount of longs to shorts. It worked decently in late 06 and most of 07, but since collapsed, as virtually no long worked for all of 08 (not even oil).

Looks like – as of this morning – we’re getting that pullback. Good job with the retracement levels.

In a nutshell, odds seem to favor bearishness ahead, though I don’t know to what magnitude.

I would advise to be careful using any oscillator during a sustained trend move such as this one – it will give false signals.

There are even some strategies that, once a stochastic becomes overbought for more than 5 or so bars, the system enters long (and vice versa). During a trend move, the only thing I find that works is moving averages.

Thanks for reading and for your encouraging comments!