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Tuesday, March 24, 2009

Elliott Wave Update ~ 24 March





Main theme(s) that TA's are trying to answer:
1. When will the market produce a bonafide Minor wave 2 pullback (at least 38%)?
Answer: When it is ready. The waves appear extended and a solid structure is in place to say its about "ready". It could not close the 826 gap which is bearish.
2. How deep will the pullback be? Wave 2's are normally 50-62% or more. enough to question the entire up move. The bulls should be doubting.
3. What is some likely spots for a wave 2 target? Backtest of the 6 month trendline. Depending on how long this takes, the lower it can go to backtest.
4. Will the 4 point gap at 768-772 get filled on a wave 2? You betcha it *should*.
5. Will the gap at 826 get closed first? Not sure. It was half closed and they gave it a go today and failed. The NASDAQ filled its gap so the market may lack incentive to do so. Also it is *perfect* in the sense that it is now *expected* to get filled and setting up as bearish.
That's the gist of it. If the market makes another bullish move to close the 826 gap, it would a wedge move likely which is bearish. But I am not betting on it.
7. Where will the market find support? Many, many places to choose from. From the 20,50 and 200 DMA's to backtesting trendlines and filling gaps and support zones, there are a lot of places.
The SPX was buried at the end of today right on breakout support of 805 so that was a bearish move. And to add to that this is a huge minor wave 1 and I can count a perfect number of extended waves so if it needs to add one more subwave I will find it hard to count at this stage into the overall structure as it has already retraced past expected wave count points. So that is good evidence the initial move up is over.

15 comments:

  1. checks in the mail dano.....thnkx..kli

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  2. Thanks Dano made $10K in SRS today on the swing....knew if we didn't fill the gap we were going down....you are the best

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  3. dano, do you have a time frame on a possible 50% retracemetn? thanks

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  4. Hmm Dano, what is your opinion on window dressing?

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  5. the way you have your 1 min labeled is the same way I saw it today.

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  6. Cool Kenny, yeah I thought that ascending triangle was gonna make its target but it wimped out.

    I would imagine there was a lot of short sellers piling on (as I was )

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  7. Anon, No time frame. But if today was the start down, 4-6 days would not be unreasonable.

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  8. Interestig charts, Daneric...

    I think you will find my charts of the coming months to fit well into your hypotheses.

    they are at http://social.stocktock.com/profiles/blogs/what-if-the-1938-rally-is

    I would love to hear your feedback on them.

    thanks

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  9. I think window dressing largely works if the wave structure is aligned for it to work. But overall, certainly a good portion of the market I am sure could care less about it.

    Maybe its a good contrarian play this quarter

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  10. Daneric: I don't understand your labeling so far in intradat time frames. It seems that based on magnitude that it's more likely that Wave 1 of the current uptrend ended at 803.24 which was followed by the first truly deep retracement to 766 which seems more likely to be Wave 2. Your the EW expert and I'm just the newbie. Why wouldn't the count I suggested make sense?

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  11. Daneric, how do you get those nice empty spaces to the right of your charts on stockcharts.com?

    I can get saces on the left side with the buttons, but not the right.

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  12. Daneric, how do you get those nice empty spaces to the right of your charts on stockcharts.com?

    under chart attributes, the extra bars.

    tiny

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  13. Thanks Tiny.

    Grasshopper, wave 2's are supposed to be deep retraces. We haven't even had a 38% retrace yet.

    Gimme a 38% and I would consider it.

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  14. Grasshopper, what we originally though was wave 2 turned out to be wave 4. We had an extended third. After 803 it broke the 3rd wave channel and went down to 766. The retracement was not deep enough either. It all fits very snugly now. And you have Dan, myself, and EWI agreeing that down to 766 was wave 4 of 1.

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  15. The 30 min look like MmM pattern

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