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Monday, May 11, 2009

Elliott Wave Update ~ 11 May




Edit 6PM: As some posters have noticed, the e-mini chart shows triangle potential. The bulls, I think, know that 900 must hold as a general rule of thumb if they are going to march onward to close the January gap and hit the 200DMA prior to a significant decline. Also volume was light today which is bullish.

Primary Count: (c) wave in a minute wave [iv] flat is playing out.
Alternate Count: 930 was the peak of the rally for the near term.
I have a weakness for failing to see potential flat moves as they are not too difficult when they play out over days. Today could have been part of a (c) wave in a Minute wave [iv] flat. If this is a flat, there could be some more early market weakness to perhaps 898-900 as the c wave low. Then the market would get bullish again if this was a flat. If its not a flat?
There is a space of SPX that is "overlap free" from 888-893 where the market powered up higher a few trading days ago. This space is what I consider virgin space that must remain untraced for the bulls to maintain their momentum in this C wave. A break into that virgin space would confirm, to me, that the C wave had already peaked. For that matter a break under 898 would also concern me that the near term peak has been set.
As I write this the channels have been nearly breeched and you can only adjust them so much.
Oddly enough, The NASDAQ was a bit bullish today. So that might help indicate a wave [iv] flat.

14 comments:

  1. Thanks for these charts & comments, Dan.

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  2. What about the breakdown of the most recent upward channel support at about 910. Isn't that significant?

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  3. Steve, we'll find out reeal soon what the market wantd to do. It appears to be a still unfolding wave [iv] pullback for now.

    Volume was very light on the cash index today which is bullish

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  4. ii as a triangle?? I think this was actually part of (c) with the wave following it failing to make a new high.

    thanks for the nice chart.

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  5. as a followup to my triangle comment, your iii, iv, v I believe is a a w-x-y zigzag-x-flat. that is only 3 waves but this iv wave could turn into an ascending triangle.

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  6. Could turn into a triangle yes. It looks trianglish on the e-minis

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  7. Dan, will you be watching the NASDAQ's behavior regarding the 200 DMA area? I'm wondering if SPX hits 200 DMA, moves above it and then retests several times. Just asking because I think the next big target would be the 50 DMA moving above the 200 DMA.

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  8. Dan, if it breaks out below 908 on your newly drawn longer term channel (i.e. back to April 20) heading for 900 and your [IV], why would it have to break back into the channel on the [V] move. Maybe it just drifts lower below your lower channel line. The futures already have in the 902-903 level on the Ford offering news.

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  9. dan, you might think i'm nuts but i say minor 4 of C actually ends tomorrow at 884. i say this because it's 1.62 of a and also aligns with a channel bottom trendline we've hit on all corrections on this ride up. i think we blast through the trends people are picking up on at 900 as our indicators have some ways to drain. We'll see tomorrow, good work

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  10. Anyone follow the 100% linear regression channel indicator? Can't reproduce the charts but all the major indexes are all at the very extreme. No advance/decline in the last two years has crossed the channel. Unable to go back any further. Any takers?

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  11. XOMA breakout...i posted UNG few days ago

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  12. Dan, thanks again for the great DD as always. The strong hanging through out most of the day between 912 to 915 based on light volume also convinces me of the continue on bull sentiment. I was sure that MM will make sure of the strong hold at 910 by end of the day and maybe try to take the bears by surprise to bring the market back up tomorrow. I closed almost all my shorts today and took profit on faz & srs. I might be jumping off a bit too quick on srs, but I don't want to be greedy. Do you think if we are safe to short back in if the market fails to hold 898 immediately tomorrow? I don't feel comfortable going long at this level with all the energy, financials and real estate sector even though there might be still money to be made, although timing is hard to control. Too much fear in FAZ made me took very small profit for the first two hours instead of waiting towards the end, though SRS did very well through out the day. Still love SRS, but concern fighting against the media and banks head to head with it based on long term. What's your feeling about FAZ & SRS if there is any to share. Thanks.

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  13. Using the weekly chart, this looks like Spring 2001 where that hope rally started in March and ended in May, and fell a wee short of the 200dma on the SPX. The market then fell to break to new lows, which is what I see happening here too.

    With most of my indicators already having flipped to pull prices south, A/D reversing, I'm not confident in a continuation of the rally to the 200dma, especially since the $COMP already reached it and has since lost it.

    With so many expecting another push it is unlikely to happen.

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  14. Is it possible that wave c is going up in 3 waves and Ist wave is over at 930 and wave 2 of c is coming down as 3-3-5 flat.

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