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Tuesday, May 5, 2009

Elliott Wave Update ~ 5 May

EDIT 1900: As LeM pointed out in comments, I took down the "flat" as the [b] wave expanding triangle really shouldn't be part of a flat by EW guideline. So this point's towards Kenny's count is being correct and a pullback to 893 may not happen. But that doesn't rule out a zig zag in the position. Regardless, the market is fixin to get real bullish if this is continuance of wave [iii] as we have charted even if it drops one more time into the 890's as my chart shows. So it comes down in arguing over the squiggles. Just don't lose sight of the larger picture which is overall bullish to finish out a C wave to peak.
I took the Kenny challenge on the squiggle chart. Waves seem corrective in nature. Consolidation for a move higher eventually above 910. However the waves didn't yet retrace to at least the 38% mark and if this is a subwave (ii), then I kind of expect a brief dip down at least lower than it has gone.

There is no rule on this of course just a hunch and using general wave 2 guidelines the retrace should be a bit deeper. The end of day waves up can be configured for 5 wave moves, its just that they look choppy and corrective which makes them C waves perhaps as I have labeled.

I think after wave (ii) bottoms, the the market should get bullish for another move higher above 907 on up to the 920's.

But Kenny has an excellent count and if 897 proves the bottom of this subwave then his double three is correct.

I like one more hard pullback lower and then bounce for bulls.


  1. Flat Rules:

    A Flat is a three wave pattern labeled A-B-C that moves generally sideways. It is corrective and counter-trend and is a very common Elliott pattern.

    * Wave A can be any corrective pattern except a Triangle.
    * Wave B can be any corrective pattern except a Triangle.
    * Wave B must retrace more than 70% of Wave A.
    * Wave B is less than twice the price movement of Wave A, including internal points of Wave B.
    * Although there is no minimum time constraint for Wave B, it must be less than 10 times Wave A.
    * Wave C must be an Impulse or Ending Diagonal.
    * Wave C must share some common price territory with Wave A.
    * Wave C must be less than twice the longest of Waves A and B, including internal points of Wave C.
    * Wave C must be less the three times the price distance of Wave A.
    * Disallow back to back failures.
    * Wave C must be no more than 10 times either Waves A or B in price and time.
    * There is no minimum time constrains for Wave A.

  2. Well LeM I guess that is not a flat then. I was only looking at it from a triangle B wave standpoint.

    If 897 is the low for this corrective, then the market is fixin to get bullish again real shortly.

  3. Daneric,

    "the retrace should be a bit deeper"

    This is the epitaph on many a shorts' tombstone (mine included) for the past 8 weeks!

    Deep retraces have been banned during P2. LOL

  4. good for you daneric..... I picked up some shorts at 805 and held them..... should be good for a few pennies...

    nice charting....

  5. SRS...This is true, this is true....

  6. Dan: The wave b that you have labelled as a "flat" could be a double zig zag. In that case, this count does not break any rules and is valid.

  7. hey, are you ignoring me...... lol..... I asked a question about the cycles yesterday from an old old chart you did..... comprendez vous?

  8. Although double zig zags usually channel quite between two parallel lines

  9. Forget the market. We can always lose more money later. I have some serious business here. I noticed you have more followers than I do, but I see the same baby picture twice. What's up with that? Rigging the followers now or is it Goldman Sachs? LOL

  10. Is anyone seriously buying up here? I remember last JAN when SDS turned on a dime and shot up 35% in less than two weeks.

  11. Sorry, Lara, yeah I think we are near cycle 11. They are more squiggly so its harder to tell

  12. LOL Kenny, I am also a follower of my own blog hehe.

  13. tartan,

    probably not a double zigzag since [b] is lower than [c] (897.74), it does not have that nice upward slant.

    suppose this pattern ending at with the triangle is really a double zigzag (the triangle is a zigzag), then that would still put 897.34 as the bottom, unless it turns into a triple zigzag which does not look good since it is rare and there was a rally beyond 903.15 at the end of the day. besides a zigzag should look like a zigzag, not with the middle b wave of the zigzag competing for net highs. so I'd doubt that the triangle is really a zigzag.

    but suppose that triangle [b] were a zigzag anyways; then that could make black b into an expanded flat as suggested leading to a c wave down.

    i doubt it though, kenny has a great count I missed today. he's right about how this should not turn into a triple 3. dan I do like what you have done, I agree, it is hard to believe that mess at the end of the day is leading us higher.

  14. since we're not hitting new price highs for this correction and since that was the same case for the 888.7->866.1 [ii] correction, can we safely assume that we are not actually in [iv]?

  15. S&P futures just hit 893 !
    Fine tune that part of your brain that issued that hunch, it is your future...