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Monday, March 9, 2009

Elliott Wave Update ~ 9 Mar 09



EDIT: 8PM Check out Kenny's post (see my blogroll on the left), he shows the wedge and focuses in on it better than I did here. Same result: last wave down to new lows.
Some positive divergences continue to develop on all the indexes. The markets are getting compressed and the waves are overlapping. The downward waves today didn't look particularly impulsive except portions of the selling in the NASDAQ which made new lows today. To me the wave actions signals a change over from impulsive down, to bottoming process to eventually a rally back above 700 and more. It reminds me of the late October 2008 extremely compressed, choppy bottoming process that occured in the mid 800 range right before the election rally. Also when the markets chopped around the bottom of wave 1(5) in January at the lower 800 range before rallying back to the 870's.


My primary count is not changed, I think the SPX makes new lows soon enough or comes awfully close to new lows. I was calling for the missing "9th wave" of an extended [v] 3 (5) and it appears to be playing out and at least it did on the NASDAQ. No reason to change my mind at this stage.


There are lots of other ways to interpret the wave structures of the past few days, and I have thrown some things on the chart to keep an eye on if the SPX does not make new lows.


As far as the VIX and CPC, I think Kenny is largely correct in that if they were to diverge, this is where they would do it. I was reexamining my CPC/VIX chart and actually I made a pattern discovery I'll maybe post tonight on.


Obviously the market still has some selling to get out of its system but there is no doubt that its being bought at these levels. Once the selling subsides, its definately going to move up over 700. It might take some initial work but once those key levels are attained (700 SPX and 1320 NASDAQ) it should run up from there. The gaps at 708-712, 729-734 and a sliver left at 752 are bulleyes.








3 comments:

  1. Hi there..thank you for this analysis..beeing studing your work..based on what you are saying..does this mean, the S&P will drop to around 650 for the bottom of minute "v" wave in the next few days ..and then we should expect a big rebound over several days since its the beginning of the upward 4 intermediate wave? which you project above 700..When we hit that 4th wave..then we should see a huge drop on the intermediate 5th wave? breaking 650 and below? Thanks for your work..

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  2. one more drop to new lows yes then a hard rally.

    Wave 5 of (5) may end below 650 yes.

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  3. With regard to the above comment and response, I come to the same conclusion w/o mapping the waves. New lows to come. Good to see confirmation. It would be a classic reversal given the setup.

    I like Kenny's Z b/c of my egotism. It is a variant of my technique of running parallel trendlines off newer S&R lines. WA also has a similar structure on a chart posted on a Yahoo link to this blog.

    I also see we have the same res @ 724. Pretty clear cut I suppose. I manged to misread the symetrical triangle last night, giving me a more bearish read on the SPX. But my reads on the BKX, DJUSFN, SKF did not surprise today.

    Regards, Bob

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