Elliott wave zigzag, motive wave, corrective wave, counting waves, Fibonacci extension, Fibonacci retracement and nested waves are profiled in this report by TheMarketDetective.com

1. 1/15/200910:49 PM pacific
“I think the .618 retracement level is the next probable target. Whether it becomes the turn I
am projecting (hoping for?) or not, it will probably produce a significant bounce, a bounce
that will provide the next clue.”—TMD 1/14/09
The Bounce
I went ahead and labeled this chart as if the bounce becomes the turn in order to illustrate
the higher level zigzag I was referring to last night. This is a good example of how
patterns are nested. Even if it doesn’t work, this is an example of the concept.
But, I need to focus on the bounce for the next clue. On the chart below I went ahead and
labeled the bounce with my favored count, but I also created what I call a Fibonacci
worksheet that shows all the probable extensions from where price is now, and the
Fibonacci retracements from those levels.

2. 1/15/200910:49 PM pacific
From here it is all about probability based on common Fibonacci extensions and
retracements. If the e-minis turn down hard at 851 then I will monitor the retracement
from .618 extension column. Retracement of a 5 wave motive set would most commonly
be .500 or .618.
If price breaks to the upside through the .618 level without a retracement, or a very
shallow one, 865 becomes the target before retracing. I move to the retracement from
1.00 extension column. I will first look for a shallow retracement (price doesn’t go below
the confluence of the .618 breakout / .250 retracement level). If it stays shallow, I now
target the 1.618 Fibonacci extension of the first column.
If that confluence level is broken to the downside, then I target the .500 level of the
retracement from 1.00 extension column, then .618.
Back to the positive scenario, if the 1.618 extension from the first column is reached with
only shallow retracements, then I will target the .382 level of the retracement from 1.618
extension column.
During this process I will scan many timeframes to try and gain additional wave count
clues. At any point during the process, if price breaks lower than the expected

3. 1/15/200910:49 PM pacific
retracement level, then the bias changes to down, and I look for patterns in the other
direction. The most probable level for price to turn back down in the short-term is the 865
level which is a Fibonacci confluence with the .382 retracement level of the move down
from the recent high (not shown.). Conversely, a break above this level would be very
positive.
TMD/DW
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