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Tuesday, March 10, 2009

Elliott Wave Update ~ 10 March







Wave 4(5) has started. The only "expectation" (if you can have any in this market) I have is that the gap at 729-734 will be closed. NASDAQ rallied a full 7% already.
There was a textbook inverse head & shoulders (IHS) breakout. The upside head and shoulder target is about 721-722 so perhaps it met it already. After the IH&S target, usually that will signal a short term pullback. If this is a 5-3-5 zig zag type rally from bottom, we should expect a "three" corrective at some point likely early tomorrow. 724 is resistance and I would think profit taking and a lot of trapped shares will be selling the rally.
So look for a quick pullback to a Fib level or a support level I have marked on the chart after this initial bullishness subsides (which futures shows a pretty good hourly doji/shooting star at 719 so it may start to pullback already). Typically these wave 4-type rallies are fairly quick affairs with shallow pullbacks in the middle. 697-701 should be solid support and I would be surprised if the market retreated under this level before challenging the 729-734 gap and the next advance to wave 4(5) peak.

30 comments:

  1. a truncated wave 3(5).... hmmmmm, where have I heard that before..... oh ya, that lara girl.... lol....

    thanks for the charts daneric.... very nice....

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  2. Actually it would be a truncated v[v]3(5).

    You cannot have a truncated 3(5) LOL!

    Is this Lara? Hello!

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  3. Duh! I seen I actually put 3(5) truncated on my chart! I am such a dunce... LOL

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  4. you aren't a dunce, you are a brilliant chartist..... now think truncated.... lol...

    and ya, it's me.... the skf board sux now....

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  5. Dan,
    Do you have any thoughts on VIX today and how it may relate to your current analysis?

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  6. Yeah I have some thoughts on it. I think it will break 60 on wave 5(5). But thats just a guess.

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  7. Dan, you should add a couple of google adsense ads. On blogs I like I will click on them everyday and I know many others who do the same.

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  8. daneric..are your charts suggesting that wave 4(5) is short and can be over tonight or by tomorrow once SPX hits 725..and then wave 5(5) begins and likely to bring SPX to 600? So based on this analysis, its time to look into shorting or buying SKF/FAZ tomorrow and days after?
    also to clarify, in the overall picture ..is this still part of intermediate 5 of primary 1 of wave c?

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  9. No. I am saying there is an "ABC" structure for a zig zag up. Today *may* have been the A wave. Then there is typically a shallow retrace for the B wave back to a shallow Fib level since this is a very bullish rally.

    Then after a pullback, it then advances on its C wave to peak. That is usually a more choppy affair because all the inital bullishness is somewhat abated and now you have overhead resistance that needs fighting through. But thats just the general idea. The market can do wahtever it wants. It may stay bullish, We'll see.

    Should rally at least a week I would think....2 tops, thats not long...

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  10. Were knockin their dobbers off Dano....I think another donation if you pull wave 4 off....bribe hint hint..kliguy

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  11. woohoo, I'm gonna have to get in zen like with these waves

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  12. dano try and post intraday ...know you r wurkin...but if you get a chance ..to reinforce any key levels or moves....will keep an eye for that.....also will attract eyeballs to blog...kli

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  13. Yo Dan,

    Have been following your charts in stocktock.

    Would be nice if you could reduce the size of your files to less than 1M. Perhaps you could save as a GIF or JPG.

    That way the downloads are faster and your file quota won't exceed the quota too rapidly... Cheers !

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  14. You're awesome.

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  15. Congrats on your new blog, Dan. Great charts and analysis. Thanks for sharing!

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  16. This comment has been removed by the author.

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  17. It probably did not truncate. but the little wedge I posted a while back was wave 5 5 3 (5), and we had a larger falling wedge that was not textbook. The pullback yesterday smacked of the second wave of the first 5 too much.

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  18. Bookém Dano!

    Really...REALLY GREAT stuff. u r in a league of your own. thanks...

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  19. Dan,

    Is it possible, we bottom w/ 5 on Mar 9, and we are towards the end of A-B-C, w/ the mark-to-market news, being the nail in the coffin to send us into wave 5? I'm thinking 724 will be the top here, as that is also the CPC, and VIX showing a move back down soon.

    My possible A-B-C targets: (W/ W4 start at 666.79)
    A - 695 (fib 50%) ; hit 10:15am Mar 9
    B - 677 (fib 62%) ; hit 672.89 (75% fib) 3:15pm Mar 9
    C - 720 (fib 1.62) ; closed just under it today

    If not then, this is probably more likely:
    A - 724 (fib 1), also happens to be resistance from wave 4 from wave 3.
    B - 702-706 (50-60% fib) - 73% possibility, if turns at 724
    C - 732-737, high of 741 before retreating; Gap filled, but resistance from Wave 3 from Nov knocks it down.

    Really could do anything, but how's this line up w/ your calcs?

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  20. DE - Thanks again for all the work. The ABC today had a near perfect 1.618 C leg as compared to the A wave off the bottom. Is is possible that 4.5 is completed? The reason I ask is the VIX is siting on the lower dominant trend line of the large wedge/pennant and the SPX has back tested the larger channel (bottom of 804 thru 742). You can see my charts on my blog to see what I am seeing. I am confused as this is where I expected 4.5 to end on those two charts. I know you can't expect things, but the set up was really nice and if the VIX violates the pennant I'll be concerned (as a bear of course).

    Thanks for all you do and the link.

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  21. Daneric, Do you think what we might have seen today was wave 4 within 3. We stopped just below a wave 4 to a lesser degree(iv--last week's highs---which repelled all the indices across the board) I think we're in Panic of 1907 crash mode now and I am looking for the SP to hit 450 to 500 by the end of April into Marty Armstrong's Pi Cycle date. The put call ratios have been too low to sustain any multi-day rallies. We might get a week long rally down down around 600-630 for the 4 in imitation of the final 2 month legs down of the 1907 crash. All the prominent bears are now even calling bottoms. Today Shedlock from DollarCollapse.com.

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  22. Daneric,

    have you considered as an alternative, that we might now be in 2 of 5? (NOT 4 of 5)


    Wave 3 does not "have" to be the longest, it can be shorter than wave 1. (as long as it's longer than wave 5, so its not the shortest)


    I mean the wave 2 was very very short in duration, and unimpressive even to be classified as "corrective/grinding".


    Not saying its probable, but it has to be an alternative.

    Thoughts?

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  23. Thanks for the charts Dan. Much appreciated.

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  24. Dan, what are your thoughts on GS, i am short from around 85...

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  25. Sold my SSO and Call options when the gap was filled for a nice profit. Thanks "Dan the Man"! Will likely buy back on the pullback.

    kevin

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  26. Can't help but notice that half the replies are from people wanting you to consider their alternative EWCs, add this, take away that, make this bigger, make this smaller. I can remember doing that to you a few times myself on StockTock. Guilty. ;-$ But now I realize that such a deluge of opinion and requests could seriously distract you from your own blog. I hope that doesn't become a problem for you. Because I am much more interested in reading what you (and Kenny) have to say than in exploring every possible alternate view of your growing list of fans.

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  27. Dan, I like your charts.

    I am wondering why you appear to be considering this all to be part of a wave [1] {black} primary wave from 2007? Could it be completing a C of an ABC flat correcting off the 2000 top? In the Dow it could be an irregular AB C, as B out of 2002 was nearly a perfect 150% extension of an A off the top in 2000.

    If so, then your completion of 5 could complete C, setting up for a primary up thrust.

    Just a thought.

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  28. Tru-Ice I think it keeps retracing a bit more to shake out the bearishness.

    I have no thoughts on GS at the moment except they are like the Energizer Bunny

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  29. GBT I always like your EW interpretations and thoughts and apperaciate the feedback.

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