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Monday, April 27, 2009

Elliott Wave Update ~ 27 April

I am not particularly enamored with my Primary Count. I haven't changed it yet to something better but the market is not behaving in a way that suggests that an ending diagonal has played out.
The QQQQ's keep making higher highs. Indeed, the QQQQ's seem on a mission to be the first index to hit its 200DMA on this rally. Remember the last time the 200 DMA was hit, your talking a LONG time ago back in summer of 2008. One more push and it will hit.
The DOW is also still trapped under an important Primary wave 1 bear trendline. It seems to be contracting underneath that trendline and could very well be ready to burst over and run up to 8400 DOW or so. I think this is an important theme: Don't get wrapped back into P1 bearish trendlines.
The wave structures seem to be tracing what I like to call "triangle" waves. Although there is no standout obvious triangle pattern, there never usually is.
So I stick with my primary SPX count until proven otherwise. But I am not particularly enthused about it. As far as the psychology of the market it seems everyone has bearish doubts including the media. They keep plastering bearish slants (swine flu scaring the markets? - c'mon!) I have been on the lookout for stories that tell how this rally has strength, but all I still find is mostly stories that try and convey a message of doubt. I encourage any readers of this to search for stories that suggest unbridled enthusiasm, not just extreme caution with a jaded outlook that it is all doomed to failure.
So bottom line: The SPX pattern suggests a drop back toward at least 815- 824. If this is some kind of triangle, then there is a chance that higher supports will hold and it does not pull back that far.


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