The game changer was the break above 1.3004. With this important resistance broken my previous working count broke one of R.N. Elliott's three rules, the rules that states that wave four isn't allowed to overlap with wave one. Once this rule was broken I knew positively that my count was wrong and that I needed to adopt a new more bullish working count, which is just what I have done. I have tried to tell the market, that it was wrong, but I have never won that battle...
So by adopting a more bullish count, does that mean we are in a new long term uptrend? By no means. It just means that the triangle I thought ended February still is ongoing and we still need wave E to finish. Where can we expect wave E to end? That is the tricky part as wave E can end anywhere, but often end at a fibo-retracement target and often at the 61.8% retracement of the D-leg, which comes in at 1.3838.
However the legs in a triangle is normally zig-zags, but again the exception is the E-leg, that can itself turn into a triangle. It will not be the case here, but rather I expect a zig-zag, where we currently are working on the a-leg of this zig-zag (impulsive five wave move in a followed by a three wave correction in wave b followed by a five wave rally in wave c to end wave E).
If we look at the four hourly chart we can see a very clear extension when the resistance-line of the base channel broke. However we should expect strong resistance here at 1.3167 where blue wave iii will be 3 times blue wave i, that means we could see a shallow correction here before the next rally higher towards 1.3359, where I expect blue wave iii to end. But lets see how it works out....
The important message from me is, that the break above 1.3004 has changed the short term direction from a bearish picture to a bullish picture and we should be flexible and respect what the Market is telling us.
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