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Friday, May 8, 2009

Elliott Wave Update ~ 8 May

Primary Count: SPX is tracing out the last few subwaves up of Minute Wave [v] of C of P2.

We can safely assume where subwaves (i) and (ii) are marked. At the very least there appears more upside to come on Monday in either a subwave (v) to peak or a "third of a third" bullish gap open and skip over resistance and run to the 200DMA .

There are 2 upside scenarios for Monday. 1) The weak scenario in which this last move up is just another ending diagonal and Monday's high manages to at least fill whats left on the January island top gap. The more bullish scenario is a huge gap up in a subwave "third of a third" and the market makes a sprint for the 200DMA in the 950's.

I slightly favor the ending diagonal scenario at the moment and about a 938-943 high because the waves seem to be struggling with big downside dips. It reminds me of the March bottom where the market kept popping up as it was heading down to 666. So in that regard, its interesting.

But it would be strange for the market to come so far and fall short of the 200DMA before a correction. So overall I am agnostic. I'll have more this weekend.

After peaking out on this last move up, I am generally forecasting an overall correction of the entire 2 month rally of at least 40-50 points for starters. That's all I can say at the moment.

Sentiment is awfully bullish. And that may signal a near term top.


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