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Tuesday, March 31, 2009

Elliott Wave Update ~ 31 March

Primary Count: SPX is tracing an ABC down to sub 768 for Minor wave 2. Wave [b] topped today it appears. Tomorrow should be downside. Targets are on the 30 minute chart. A brief dip below the C-E line I have been showing on my longer terms charts will likely happen. This would make sense of the 768-772 gap is closed, breaking stops should take it to 757 which is also support. A very bearish wave [c] could possibly extend all the way to 724, but I would not count on it. But certainly anything between 724 and 757 is also possible. Just count 5 waves down! And then go long.
Alternate Count: SPX has already started Minor wave 3 with 779 as the Minor wave 2 low. This would be based on minor 2 tracing an ABC expanded flat (EWI's pirmary count). Me and Kenny don't like that count, but we have to mention it because it is a valid alternate count strictly just looking at the waves.


  1. Ok Kenny and Dan, i have a bit of a theory that may be a bit of a stretch - it's based mostly on '38 tracing which i know is somewhat foolish but proves it played out like this once before. Instead of flat out conceding that we're in C right now, what is the likelihood that we're currently getting very long (as in time period) minuette waves right now within a minute A (yes, we're still in A). Like we just finished the 2 of A and are starting the 3 of A. I mention this because our ABC cycle in '38 was stretched over several weeks and followed the pattern i mention above. Also the pattern above gets us more to 50-61.8 retraces which are much more common for 2 (your theory is closer to 38.2) Thoughts?

  2. Can C waves be truncated? (My wallet is asking that question.)

  3. Thanks Dan. Do you have a downside target for XLF? Last Friday it looks like you had a downside target of around $8.70, but yesterday it closed at $8.35.

  4. Johnny, I always consider the selling goes lower and it can on this [c] wave to 724 if it expands by a 1.618 Fib number.

    So in that respect there is no need to complicate things further until they need to be.

    So far it looks like a straightfoward 5-25- zig zag down so I'll have to chart it like that until it deviates.

  5. C waves not ending lower than A? Not really. It is strong guideline that C always traces lower.

    If not is usually gets called something else like a flat

  6. 5-25 Dan. Am I missing something? Just kidding.

  7. Hi Dan,

    Does EWI think that Wave 1 topped at 803 and Wave 2 ABC traced 766-833-779?

    Does EWI think Wave 2 only required a 54 point correction and only 3 days to finish?

    And if EWI thinks Wave 3 started today, why would a supposedly "explosive" Wave 3 PLUMMET 14 points straight down at today's close?

    Do all of these peculiarities conform to EWT rules?


  8. Davlee

    I think Wave 2 will end with a double (WXY) zig zag.

    Down on Wed - ADP Jobs Report
    Up on Thurs with sell the news - M2M Debate
    Down on Fri - March Job Payrolls Report

    If Thursday's M2M Debate fizzles and the Market tanks then I would have to take another look at Primary 1.

  9. SRS, I suspect EWI will be changing to conform to our count. His entire count hung on have one five down after the top. He (an me) missed that yesterday, but now it is clear that a five was completed at yesterdays low. If he maintains his count, he will have to deal with all the structure off the top, up to today's high, and especially the impulsive nature of the selloff into the close. The zig zag (that may or may not morph into something more complex) is the best explanation.

  10. Thanks for your answer, Kenny!

  11. Yes, SRS, I agree with you completely and tis why I think a deeper retrace is in stor. I don't like that gap at 668 either.

    I am a gap player (SPX) as you may have guessed.

  12. Good old Dan,

    This is the THIRD time you said 668 when you meant 768. : > ) I think the P1 bottom at 666 must have been seared into your mind. You might have to repeat "7"68 over & over to reboot your brain. Cheers! : > )

  13. hehe yes SRS I am slightly dyslexic

  14. Sorry, Dan, I didn't know. I wouldn't have teased you, if I'd known. Now I'm even more impressed with your knowledge and skills.