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Tuesday, April 14, 2009

Elliott Wave Update ~ 14 April




The Primary count has the SPX topped at 864 and a major retrace is occurring. The closely considered alternate is an ending diagonal is playing out and it will bounce off of my lower blue trendline I have on the SPX chart and make a new high potentially a small spurt into the 870's. This is how the ending diagonal played out in 2002 I showed on last night's chart.


I'll be watching a few things tomorrow. The banking index has a clear head and shoulders going on and broke through the neckline at the end of today. The lower H&S target is exactly at support at 30.95 which is the top of its recent ascending triangle. The banking index traced out a quick 5 waves out of its ascending triangle and met the ascending triangle breakout target so the fallback from peak was expected. If the neckline cannot be regained immediately tomorrow, count on a test of the 30.95 mark for sure. As I speak financials are selling in A/H's so the neckline moves even farther away.


The second thing I'll be watching is if there is one more up move finishing off an SPX ending diagonal move which, if it is to happen, would occur from where I placed a blue trendline on my SPX chart. Although I can count 5 waves from the 779 low (which is why I have 864 as my top - you have to go with whats there), the 5 waves from 779 structure does not channel at all really and one more up move would make a nice ending diagonal. But the market likes to keep wave counters guessing which is why I also check my Technical Analysis indicators.


The lower main channel was broke though today which I suspected it would and a struggle ensued most of the day to regain that channel. It failed. So thats another reason I favor a bigger pullback to come.


TA-wise, volume definately picked up today and it was a red bearish candle after a doji-type candle so that is bearish. I could show 3 -4 charts showing how the market is overbought but I could have shown the same charts last week and it still went up. But sooner or later there will be a near term top and I do favor 864 as already being the top.


I also haven't forgotten the gaps that exist above 800 (nor at 768) and neither has Mr Market Maker. Time for a few of them gaps to be filled.


Financials usually lag in any rally and they did on this last leg up. Well, they busted out of their ascending triangle and quickly met the target. So all market laggards have finished rallying. Now its earnings season, and let reality set in some more perhaps for a while.


The upside surprise would definately be having today's gap down getting filled prior to the next lower gap I show on the chart. That would be the ending diagonal move.

15 comments:

  1. very very nice work daneric... you are consistant and I love the way you cover the different alternatives.... (by the way, whatever happened to that money you rolled into your 401ks.... you must be rich now.... lol) anyway....

    my charts are up on http://chartgirl.blogspot.com/

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  2. wow, and yahoo has banned me from posting... lol... guess I'll get a new user name.... lol

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  3. Thanks Lara. Yeah the 401K is still there. Gonna hold until the 200 DMA is reached at least....

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  4. Nice work Dan, my take is 779 will hold this time around, but i'm looking for 735 to go long, do you see 735 in the cards.

    TD

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  5. TD, no I don't see 735 in the cards. Maybe a quick gap close at 765...

    757 should hold.

    But....this is no sure thing like it was from Sep - March....

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  6. 1,2,3,4,5 could be pushed down the wedge imo.

    Therefore 5 is done.

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  7. 875 of C is still my call from last month. The market now has enough week hands looking to buy the dips which they will do on the pull back to 750 for D then up to E 4 at 806 thinking its 1938 all over again except they are merely fractals at different degrees. They will be in for the final bankrupting move of the overall move that started in 2007. 625 remains the target and it may be so fast and furious that 500-437 is not out of the question. Time which is more important than price is callng for the final low near July 27 of 2009. Keep up the excellent analysis as this is about to get interesting.

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  8. K-Dog, so what's your A & B points. I can guess but I'd rather not guess.

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  9. Hi everyone,

    Just a friendly reminder that there are some really useful ADS here on Daneric's site.

    You should click on them regularly and check them out.

    Cheers.

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  10. K-Dog, good support on the Monthly chart for SPX is 555.

    TD

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  11. Yep, useful ads ;)

    Daneric, we're happy that you have good ads. Going to check them out. All of them, every week...

    Everyone should check out these ads.

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  12. My labeling has A at the 940 and change level back in Jan. B is at 666 and change with the current wave as stated being C and acting as it should. This is just my opinion and Dan is the one stalking the trade quite well. I'm here because he's provided a forum that allows us to. While we're making noise he's providing the visuals and we have good ads as icing.

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  13. Sterling work dan, can't thankyou enough, really! I am trying to claw back 401k losses. Having missed 666 I bought 768 and sold at 833. Now I am waiting for 768 gap fill 50%fib to buy back in, intending to sell at the top of minor wave 1 (or intermediate A) to play safest (200MA?).
    However I see you have now added intermediate C as a further possibility, a whole new scenario. How and when can you determine it was C after all? Why risk this deep retracement with your 401k?

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  14. This last Anom comment speaks exactly to what I've been stating. Their waiting to buy the pull back thinking they missed the next big bull market. Multiply that by what now appears to be the mindset of the sum of the whole, and any failure to hold the pull back will eventually take out the 666 low plus. Also re-labeling is an inherent issue I have with EWA

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  15. me again, no, I don't. My last run up was 8.5% in a few days, I will just take what I can safely get out of the bear market rally, free trade with funds.

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