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Wednesday, May 20, 2009

Microsquiggles

The chart patterns always like to fool us Elliott Wavers as much as possible. Today looked like a surefire ABC zig zag down and that means the market should reverse back up shortly tomorrow. So it might encourage some to buy in A/H's for instance especially when futures hold steady until 8Pm. However I think that zig zag is a false pattern.

I charted the microsquiggles for a bearish count, not a bullish reversal. So by my count, the market is again at the point of a "third of a third" potential big gap down and big down day tomorrow.

The last time I charted this "third of a third" down potential the market was not quite as primed as it is now for a further fall. It was oversold then and had yet to test the 875 support (an expected bounce area) and was showing positive divergence. But now it is technically ready to hit that big gap down as it is not oversold and peaked less than one trading day ago.

So I think the "zig zag" down is a false pattern and is actually just the beginning of a bigger bear wave down. If I am wrong, hey thats just a better short entry!

Overseas markets may very well bleed tonight which should pressure the e-minis futures. Europe had like 5 up days. They are primed for a fall too.

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