HD Home Depot
Monthly -> Alternate wave counts depending on whether you are in LT secular BEAR camp or
New Millenium Bull. Lots of issues with the new bull scenario, just one here is wave 1 should never
get fully retraced by wave 2, period. Here spikes took out wave 1 low. It is fine for b waves to do so.
From here on I will label the waves according to my a-b-c camp! Wave c the big run up hit exactly the 2.618 fibonnaci extension of Wave a! Another one of the countless "coincidences" I see happening at this stage of the market and why this is THE PLACE to be looking for a major reversal.
Wave C is a sight to behold with embedded 5-wave within wave 3, therefore a "3rd of a 3rd" positioned right at the midpoint of the rally or 50% fibo retracement where it should be, often there is a continuation gap here marking the midpoint of the rally however not this time. One issue is it appears the smallest wave which can't happen but I counted the larger degree 5th wave throw over; often spikes, throw overs, and gaps should be negated when using fibs grids, often you will see me place fib grids where they align at highs and lows with candle bodies not spikes due to this (Connie Brown, Alan Farley and many other traders have documented this) Wave 1 is the extended wave and Wave 3=Wave 5.
Weekly -> So you can see more detail of wave structure in orange. Also I have 2-4 trendlines for both degree impulse waves. Small degree broke in flat C wave (where larger wave 4 ends) that broke its 2-4 TL (yellow) and then the Larger degree has just completed its 5th wave up (clear 5 waves within it) NEXT
A signature "waterfall" decline with this January sell off! All the big buyers have left town. This confirms my wave count and HD should offer great shorting ops here on out. It broke the larger degree 2-4 TL (orange).
This stocks clear wave structure makes it a prime trading instrument.
The waterfall had a nice spike double bottom so we are in its A-B-C correction upward in line with broad SP and Dow. It hasn't reacted much compared to the indiceswhere wave A's have already retraced to higher Fib levels so it is showing relative price weakness. I am looking for it to make it to at least the first resistive CV at 38.2 Fib and 200 DMA to evaluate initial positioning but a lot will depend on overall pattern unfolding in the broader indices.
Oh forgot to mention for those of you in the secular bull camp we would still be due for a large wave 4 decline at the top degree here!