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Wednesday, June 3, 2009

Elliott Wave Update ~ 3 June

Its hard to say with 100% conviction that "YOU ARE HERE" with such-and such a degree wave etc. But so far I feel confident. I called for the pullback to 924-926 as a perfect spot for a B wave. It did not disappoint. It hit gap support, the 200DMA and the 38% retrace spot.

Are we in the exact wave as I have labeled and the exact level of degree? Maybe. There are other valid counts to be sure. However the beauty is that often the closest alternate count has the same basic targets. For instance suppose the 949 top was actually a wave [i] top of a final Minor C wave to P2 peak? Well, we would have our wave [ii] pullback and then of course a wave [iii] would power it up.

So thats the nice thing. I am calling for a simple Minor blue ABC zig zag up to peak out of the triangle breakout because of the way I have the red (W) and (X) marked. The market has traced out Minor wave "A" already at 949 peak. But if its a slightly different count it won't matter much because the target areas would be similar anyways. So don't sweat the count.
And why do I have the (W) and (X) marked there? Its just the way I like to do it. I always assume that a corrective has to actually perform a corrective and then the market determines if that is enough of a corrective. If not, it traces an (X) wave and then powers a bit higher in a second corrective until the corrective has done its job adequately. And make no mistake, P2 is a giant corrective wave. Thats the theory behind a combination corrective. In this case it would be a double zig zag connected with a triangle which is right on target. This goes no matter what wave size your talking about.

So the way I look at it is like this: The market traced an ABC zig zag to 930 peak. But that turned out to be not enough of a retrace for P2. So it traced an (X) wave, in this case a contracting triangle. Now the breakout means another ABC zig zag to peak. That is my reasoning for labeling it the way I do. I see no need to change it because it makes sense when you look at it from that perspective. Would the last zig zag up maybe look tiny compared to the rest of the corrective? Sure! But hey if the last ABC is small, thats ok! Because thats all the market required perhaps.

My upper target is around 986-988 for P2. One more 5 wave move by my calculations. And it appears the end of day move signalled the start of the final Minor C wave to peak.

Any solid break of 914 support to the downside means something else is happening.


  1. Hi Dan,

    I tend to favour the 5 down given the uncle of a 3rd wave gap today ( it just seems simpler but i am keen to know if there is a special rule that had you favour it ) , the implications in the short term as you mention are a little different but in the next few days its all one. Great job with the BKX count , your a star !!

  2. i second david's count where we wrapped up an impulse move down. it implies a small corrective up, another move down to maybe 914 then your shot up. otherwise good work d

  3. To Dan From Max Cherry,
    My view is that we ended a simple ABC correction on May 21st from the 930.17 top and are in a 4th wave correction, 913.84 being the top of wave 1. Interesting enough, the 930.17 top was 44 days (half of 89) from the 666 March 6th low, the May 21st low come in on the 55th day from March 6th. It will be interesting to see if the next significant top comes in July 14 that would be 89 days from March 6 and 34 days from the May 21st low. My guess is one more rally to completes A of ABC with C topping in the 1000 area mid July, of course a move below 913.84 blows it out of the water.

  4. same here...the 5 waves impulse seems more clear and straightforward, more simple. the 1st and 5th are about equal, 3rd gapped down, 2nd retracement was deep. (looks to have corrected a leading diag.) All these things are common things in impulses.

    the [x] wave shown seems small to me. and (b) of [w] seems deep for a zigzag.

    I'm seeing a possible expanding flat into the close. that would explain that odd breach to new lows around the close. So perhaps there is a move down tomorrow either starting a 3rd or making the x in a expanging flat-x-w combo. If we are correcting an impulse 5 wave down move, we are sitting close to 38% retracement and would have already corrected into the territory of the 4th wave.

    but zooming out I have to agree with dan that we move up from here somehow.

  5. caldero says kenny and plilipe are rookies and they cant hold a candle to his teabags

  6. Calero can suck their dicks with hot t-bag

  7. Tracking with you! thanks!

  8. Quick question if I may... The W wave took about 2 months to pan out, the X wave about a month. If your top count is correct, this means that the Y wave will end fairly soon. How can it span such short time? (if this is a dumb question, sorry... only been studying elliot waves for a couple months) Big fan of your work. Thanks

  9. Can P2 blow substantially through that Great Bear line? Do you really believe P3 will start within a month? I can't see that. What is the catalyst? Perhaps a rounding top then a big huge meltdown in October or something, but I am afraid P3 is being over-dramatized. After all, P1 ended truncated, did it not? Is it possible P3 is a long grind to a slight over shoot of P1 lows then a long grind back up - sort of a big long sideways move for several years? That's my thought anyway.