One important thing to note on this chart and I have seen it on many, many, many charts. When a retracement is in progress, the bulls are always careful to push that 4th wave up into the region of the first wave in order to stop a clean impulse wave from being formed. As you probably recall, no 4th wave can enter into the area of a 1st wave. In this way they end up with triangles more often than not in order to slow the rate of each of the required pullbacks. On the way higher, they make sure that the waves are clearly motive with no overlap. This is an aspect of "the look" or "the character" of the chart that many EW practitioners mention in their writing.
As you can see with the PCLN chart below, the bulls tried and tried to get the 4th wave up into the 1st wave but they didn't have the steam. There is only so much cheap credit out there and when it runs out so does the buying power. These kinds of tiny misses in the charts are telling me that the credit is drying up and with it the margin debt.
Normally you would not worry much if interest rates went up on you a quarter of a percent. But when you are leveraged out the wazoo with margin, it matters A LOT. These guys never leave any buffer in between themselves and oblivion. You don't to be a Wall St legend by not hanging it out on the edge 24/7/365. It's clear that the markets did not like Yellen's policy change today. They like lots of advance notice in these matters so they have time to set up a plan to screw the people coming and going. Besides, Yellen was supposed to be a dove. No matter how many times she repeated "continuity with Bernanke" the market clearly does not trust her. After all, she's the disposable fed chairman.
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