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Tuesday, June 2, 2009

Elliott Wave Update ~ 2 June

Primary Count: The Minor A wave of a 5-3-5 ABC zig zag up to P2 top peaked today just shy of 950. The waves for most of the day appeared to be B-type waves, a bunch of overlapping zig zags. It was clearly in corrective mode.

The e-minis show the channel starting to break which would support the notion of an A wave top. Also the wave [v] peak hit the mid-channel line which can be normal if the market is unable to produce a more bullish move.

The market is behaving like a bear rally zig zag to a peak. A robust initial move (breakout of the triangle) followed by a high altitude rope-a-dope bunch of overlapping correctives and eventually the last corrective wave will retrace to some B wave low (my target is 924-926) and then another 5 wave bullish move kicks and take the market past the resistance area that stopped the A wave on up to a rally wave peak.

B waves typically retrace 38% but not always. 926 SPX is the 38% retrace zone. The 200DMA also lies at 925. Gap support is at 923. Its a logical retrace area for a B wave.

Bullish daily sentiment is getting up there for equities and Kenny has an excellent post today that a bunch of markets are getting ready to turn sooner or later all at more or less the same time (commodities, Dollar, Euro, Gold & Silver, Bonds, equities).

So due to the way that it has all shaken out (the way all the markets are configured and sentiment), it may indeed be a P2 top or at least a significant rally high for the near and medium term. Its too early to tell which. However, if a 988 high sets in, in a double Intermediate zig zag move from 666, its a satisfying rally indeed. If 1000 is the "goal" the market has a way of tripping up that goal by about 10 points it seems. If I planned on selling at 1000, I suppose I'd be happy with 985-988!

You truly cannot call a P3 wave starting down until there is some supporting evidence along the way (wave patterns, selling volume, breadth, etc, fear, sentiment, etc.). But I am getting ahead of myself again.


  1. Thanks DE. Top of P2 hugh? Tough call to agree with or go against at this time. One thing for sure is that P3 is coming. Still waiting on the external catalyst that even the manipulators can't overcome and China may be setting us up for the fall. Nice work as always.



  2. How about a 999 top for P2 after a 666 bottom for P1...that is a 333 rally.

  3. DE - check this out if you have not seen it. It may rehash some of the many earlier LT charts, but I thought dives a nice picture from afar where we may be headed when we turn. Any comments would be appreciated.

    Thanks again.

  4. really good work, as usual! Thanks,

  5. shank, who tf is paying you to get all your trades from other sources??????????? grow some cojones for yourself, rookie.

  6. Daneric, your chart seems okay on the surface, but to the savy TA viewers like myself, it does not have a large dot on it like Kenny's. Given this, I will have to dimiss the analysis outright. Please go back to the drawing board with your wave count.

  7. Yes, spelling correction, "dismiss", not "dimiss" in my post. Told you I was savy. I'm not the previous Anonymous poster, no idea who shank is.

  8. Anon..

    Another spelling error you may have overlooked: It should be "SAVVY" not "savy" as you wrote.

    The point I am trying to make here is that Dan goes out of his way to do these charts, and comments so that we may benefit from his insights. All you do in return is undermine his efforts. Also, you post as an "Anonymous" - what's up with that?

    One peice of advice: If you do not have anything nice to say, refrain from saying anything at all.