I was counting on a final 5th wave and the start of impulsing to the downside (5 waves down into wave {A}blue). What I failed to consider is that wave {4} was likely an expanded flat to alternate with the sharp wave {2} as depicted in this chart:
I also didn't consider that wave (C) orange of wave {3} blue could have been an ending diagonal with a very short lived and excitable 3rd wave.
Another HnS pattern could be setting up again, possibly with two sets of shoulders, with a Right Shoulder #1 (RS1) likely to fill the large gap down (blue box). The right neckline likely to be completed soon in October.
Here is what the pattern would look like zoomed out to incorporate the 2000 bottom:
This larger view also requires us to consider that a very larger ABC structure could be complete here. Wave [C] red now equals wave [A] (about 490pts a piece) a common EW relationship. Wave [A] was a well organized impulse to the upside, but wave [C] has so far produced a very choppy move to the upside with many overlaps, a quality of ending diagonals. I suspect that a right shoulder bounce should arrive soon, but needs to stay above that neckline (green) on a weekly closing basis. If that neckline does not give support (blue projection) then a right shoulder could be denied and a test of the previous area of price congestion may come much sooner than later.
This HnS idea is killed if price moves above the head near 640ish.
One more thought to throw into the mix, that of the expanded triangle count:
Expanding triangles are rare, but the current pattern is very close to producing one. Wave (C) would need a reinterpretation, and wave (E) should stay above the neckline as a 3 wave move. This would allow for another 3 wave move up as a final 5th above 640.
From a fundamental stand point, if crude continues it's MT trend to the downside (target 60 next, then 33 to 45 eventually), but gold finds a significant bottom this month. The profitability of miners will gain as fuel costs would likely shrink considerably. Those miners with little or no debt and large dividends will likely survive the best under another stock market sell-off. Some juniors with pristine balance sheets, good management and proven reserves may become take over targets by some seniors if their stock prices are dumped into an attractive buy zone.
Good Hunting.
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