The power of this wave is illustrated here. The horizontal line is resistance and as you can see that resistance has stopped price many times. Two reactions here mark minor and major wave highs. The implications of this first recovery wave are great. Technicians believe and have observed that the first wave in a new series has predictive implications –using the rule of seven (http://www.edwards-mageee.com/ggu/ruleofseven.pdf). This procedure generates several targets– in this case the first two are 3164 and 3434. From the recently important level of 2800 these may be intimidating, and we do not present them as predictions or forrecasts, but as the products of the procedure.
This reading may appear tenuous but then there is the Point-n-Figure system which looks for a target of 3659. This is a confirmation of the strength of the trend and the positive possibilities lurking in it.