1/27/20098:52 PM Pacific

We breached the most common 1:1 ratio zigzag late this afternoon negating my first choice last night. On this chart I am labeling the 1/26 decline x but it could also be X depending on where we are in the pattern. If we turn right about here, where the lower blue arrow points to a confluence zone, then it is probably x, an extension of the a-b-c up from B. If we continue higher without a retracement, then the next target is the confluence zone annotated by the higher blue arrow, and the 1/26 retracement is X, the entire retracement of the A-B-C up from D. It is kind of Elliott semantics, however, because I don’t think the net in the bigger picture is going to change either way. The most probable outcome is that we work our way to descending trend line of the contracting triangle and turn lower. Fibonacci worksheet

1/27/20098:52 PM Pacific

If we turn in the vicinity of the first confluence zone, the probable pattern is shown below. Perfect symmetry and probability favors this option, but with tomorrow being Fed day, uncommon ratios are often common place. Price could push straight to the target. If this happens, the target is 890-905. A small overshoot or even a small undershoot of the descending trend line is common for wave E.

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