GBP 1 Oct 2009Nothing works like Elliott Wave analysis when it works!  The Pound has dropped 200 pips already. While we could expect more weakness ahead, I would like to be prepared with a plan of action should we see a strong correction from around here. ( I am not saying this correction WILL happen. Just getting ready with a plan IF it happens).

Take a look at the chart. Suppose the first wave finished at 1.5944. We are then witnessing an irregular B wave that made a new low below 1.5944. The ensuing “C” wave will take us above the top of the “A” wave by a factor of the distance between the end of the first wave and the bottom of the B wave. All this is explained in the chart. Once we finish the correction, we should sell again. Enjoy!

As always, it is good to have an alternate count! So here goes…

GBP 1 Oct 2009a