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Tuesday, April 28, 2009

Elliott Wave Update ~ 28 April

Short term the market may have one last push up. Look at it like end of month window dressing. The market is coming to a small apex point. How it breaks is anyone's guess. The short term wave stucture actually favors the move up.

Regardless even if it moves in a last fit upwards, it should correct backwards to the 820's SPX at the least.

Look at the chart of December that I provided. It shows the market tracing 5 strange little waves up after a very steep decline from 895 SPX. After that 5 strange waves up, it retraced back deeply. I think there is a good chance for the pattern to somewhat repeat here. 5 waves up in a strange humping pattern following a steep 50 point loss.

But even if another push does not come, a retrace back to the 820's looks inevitable.


  1. We all need a definitive answer to the "end of month" dressing for the MMs. Settlement takes 3 days, so if you didn't own it/sell it by Friday (a high point), I don't think it counts for the end of the month. Wish I knew how that worked.

  2. I feel ok staying short.... if it turns on me, I'll stop out.... see ya'll.....

  3. Dan, your top chart is labelled December 2008....

  4. Given where combination waves typically occur, it does make sense the next move will be higher.

    Fair Warning, more old hippie guy ramblings !
    As for the effect of window dressing or MM, it seems the next advance in EW may be an objective structure for external influences. Without an input for environmental variables that impact herd behavior, can it ever be predictive in time periods useful for trading ? It is clear it is useful for medium term investing. It seems to rely on subconscious processing by the individual predicting short term market direction (heuristics). Perhaps this is why there are no computer based EW systems that produce usable results ?

  5. DE, do you think the stress test results on friday will give the S&P a push upward, thus validating this funky upward move?

  6. Action today was impressive considering the flu, stress test and other negatives. They held up very well. Therefore one last push up scenario seems to be likely.

    GCT, your stops will be hit. FAZ will make one more final low before bouncing back over $20.

    I cannot explain how/why the market is holding up still at these levels, but it is. Although I am seeing more weakness, lack of broad advance. Seems to be more narrow than before.

  7. looks like that 3rd hump is playing out, dow just hit new highs fractionally. looks like one more pullback today before making one more advance to complete the last 5-3-5 zig-zag that began tuesday. another new high today could fake people out and make people really bullish again giving a good selling opportunity. That would set us up for a nice blue C wave down. I'm still hanging tight short.