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Wednesday, April 8, 2009

Elliott Wave Update ~ 8 April

The count scenarios haven't changed from yesterday so consult yesterday's charts. Primary count has the SPX eventually heading back to sub 800. The alternate is just too stupid at this point to repeat and that is that the past 5 days has been a Minuette (!) wave (iv) tracing out before a push to 850 or so.
I tweaked my intraday waves and I agree with Kenny's intraday counts on the 1 minute (and I didn't peak first, we both came to the same conclusions and then I seen we were similar which is not surprising). The larger point is this thing may retrace higher or could break down at any time its just a tough call but the NASDAQ seemed a bit peppy so I favor first more corrective to the upside (yet less than 845) prior to the market retracing on a deeper move.
A few interesting observations I would like to comment on:
1. The VIX is breaking down. Its getting near its long-standing gap soon. However it looks due for a bounce. So perhaps a nice bounce of the VIX will correlate into a lower cash index SPX move very shortly.
2. The /ES minis, futures, have made a high of 848 (over 850 SPX) Sunday night and a low of 802.25 Tuesday evening. both the high and low was made in A/H's. Its very unusual for this not to get reflected in the eventual cash index during trading hours. The differences are quite curious. A look at the structure of the futures from 848 to 802 takes the form of a 5-3-5 zig zag move which of course does not translate well at all into the SPX cash index waveforms at the moment. So needless to say, its been quite challenging. However both futures and SPX have both corrected about 50% so in that regard they are similar.
3. Two gaps above and two gaps below. A deep retrace of 78% or more back up could fill one or both upper gaps prior to a move back down to sub 800.
4. The market wanted to move higher in A/H's Sunday night (848) and also showed a willingness to move lower Tuesday night (802.25 low). Yet both moves did the opposite out of the gates on Monday and Wednesday. So...its a tug of war. Good luck trading.


  1. Yet another reason to distrust futures as predictive measures for the open a/h.

  2. Dan from Max Cherry
    let's say your primary count is right but the ABC is a running flat where C doesn't move below A and the 5 wave down in the S&P futures was the C and diagonal triangle in cash and if I may be permitted to go non-Elliott, the 60min S&P chart is looking like a cup and handle pattern

  3. Hey Daneric! I love it, thanks.... need your help with my stockcharts thang.... how do you give yourself extra chart to draw out what you think will happen.... I want to do that too?

  4. girlcantrade, if you want to draw out what you think is going happen on you have to create a chart, then go to annotate. This will let you draw trendlines, fibb retraces, and notes.

  5. Lara select the extra bars box and plug in some numbers

  6. Daneric,

    You wrote tonight that S&P may reach 850 soon, and then fall below 800, maybe to 768.

    But Kenny wrote tonight that IF 845 is exceeded it means that Wave 2 is over, and we are actually in Wave 3. (At present, Kenny does think Wave 2 is still under way.)

    Can you please explain why you think 845 is NOT the decisive limit, and why 850 would not be too high for Wave 2 to still be in play?


  7. SRS if the SPX reaches 850, it will have fulfilled a 5 wave move (alternate count), albeit a long-winded one, from the 779 low. That could be the top of Minor wave 1 (or A). Then a pullback for Minor 2 would then occur. Thats the alternate count.

    It just doesn't seem like we are in a wave 3...but I do not rule it out that the moves from the 779 low is the opening gambit of wave 3.

    I really don't have a good exact read on things at the moment. The market seems to be rolling over, yet the price action of the SPX is quirky.

    Basically support is being held in the cash index and it seems consolidation of some sorts is taking place.

    Yet , I tend to think something explosive will happen to cause a break in that support soon enough. What event that is I don't know but it should happen soon if this is Minor wave 2.

    But at this time I don't favor a higher high above 845 because that 5 wave move seems to be too long winded. I favored it a few days ago, but its more remote now.

  8. Good morning, Dan:

    Thank you for your detailed explanation.

    Good luck trading this market

    (or staying in cash until direction is clear).

  9. Well we got our event by Wells Fargo saying how great of a quarter they are having. Must be nice to cook the books based on the new Mark to Market Rules.

  10. Wow...and just like that we're right back into the wave 1 channel.

    Think you had it right originally, dan... As much as the market surprised to the downside before, it can do the same the other direction.

  11. The Pit Traders know WFC's report is fantasy. Rumor is one of the Big Banks to report next week will report a huge loss. With the CEO of BAC rumored to be out it appears that this might be the bank their talking about. I'm sure they will spin it in a positive light so the market will rally on bad news.

  12. Dan from Max Cherry
    I keep going back to this and would like your opinion (if you can see my notes)$SPX&id=p38271290009&def=N&a=160200926&listNum=12&cn=20

  13. dan
    great prediction about spx 850 bro.
    we are proud of your work.

  14. SHORT TERM: market uptrend resumes with new highs, DOW +246
    Overnight the Asian markets were all higher. Europe opened higher and closed +2.3%. US index future were higher overnight and at 8:30 the weekly Jobless claims were reported 654K v 674K. Also, the Import price index rose to +0.5% v -0.1%, and the Trade deficit declined to 26.0 bln v 36.2 bln. At the open the market gapped up from yesterdays close at SPX 825 to 835 and continued to rally to 851 by 10:00. That's a new high for the uptrend. A small pullback followed over the next couple of hours to about 844, only 7 points. Then the market headed higher again led this time by the Financials. Heading into the close the SPX hit 857, the high for the day, and closed there. For the day the SPX/DOW were +3.50%, and the NDX/NAZ were +3.45%. Bonds lost about 13 ticks, Crude rallied $2.70, Gold slipped $6.75, and the Euro was lower. Support now jumps up to 848 and then 789, with resistance at 912 and then 935. Short term momentum was overbought all day. Tomorrow is a holiday in many countries, but the Gov't is planning to report the Budget deficit which is expected to be astronomical.
    The market responded to a quadruple bottom at SPX 815 by rallying in the last hour yesterday, trading higher overnight, and then gapping up at the open in typical third wave fashion. With the SPX clearing the 848 pivot and the next pivot quite a distance away at 912. It's probably best to review some fibonacci relationships of Int. wave C to Int. wave A. Since Int. wave A travelled 166 points (667-833), and Int. wave B bottomed at 780, Int. wave C could stop at 0.50A (SPX 863), 0.618A (SPX 882) or even make it to the next pivot. These two levels, SPX 863 and 882 should be observed for signs of a short term top in the coming week. Best to your holiday!

  15. By the way i dont know who posted the earlier but its a post made on another ew blog from tony caldaro its is thursday update

    go check it out

  16. Where are we now? What a surprise... Any clue?