Once a 21 bar price low was recorded after the end of wave 'b' on April 9 we could look for the end of wave 'c'. This occurred on May 7. Wave 'c' was certainly complete once we had a 13 bar price high after that point, which just happened on November 19. Thus we can say that a complete Flat pattern has played out from the June 2010 high.
Wave 'a' of this flat was accompanied by a TD Buy Setup (the number 9) and bullish divergence between the RSI and Composite indices (shown above the price chart). We then had a nearly 100% retracement rally to the wave 'b' high.
A TD Countdown 13 posted on June 25 but, although accompanied by a RSI/Composite divergence was not followed by a 'price flip'. Instead a new TD Setup followed which completed on August 20. After a minor corrective bounce it was followed by a new low. However, since it had another RSI/Composite divergence with it we were justified in placing a buy stop loss at 24.26 (the horizontal cyan line on the price chart). This line never had a confirmed break and then a final (third in the series) RSI/Composite bullish divergence led to the current rally and the end of the Flat pattern discussed above.
Tomorrow we will look at the daily chart to see what has happened since the end of the Flat.
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