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Friday, June 5, 2009

Elliott Wave Update ~ 5 June

The bulls jumped the gun on the assault on 950. The MM's used the occasion to close the gap that existed. Then hard reversal and close the gap up. Then the rest of the day, a lot of rope-a-doping. They look like triangle waves.

The market is trying to position itself for a move over 950. The first was rejected a few days ago and a bearish retrace occurred. It appeared after moving off the 923 low, it was on its way to making a move and then just got stupid on today's opening which was the MM's closing the upper gap. Bears smacked it down hard yet there was no intense selling. Support at 934 held.

So the rest of the day appears "triangularish". In either case, Monday should resolve the B wave end point. I have the primary count labeled as a "double three" corrective with a potential triangle in the final [y] wave position.

If prices hold in this triangle pattern, I am looking for that bull move over 950.

Unfortunately this is one of those times where my top alternate count (3-3-5 flat off the 949 peak from a few days ago) is just a bit opposite my Primary count. I don't like when that happens but the alternate count back down to at least 923 is the result of negative divergence on the 30 and 60 minute charts. And in any event, my overall "count" remains the same. Both are searching for an orthodox Minor B wave end of a final Minor wave sized ABC move to peak post-(X) wave triangle breakout at 887.

However, prices wanted to maintain near 940 today and a bearish retrace will ultimately hurt the max price potential of P2 at this stage. So even though another move down to 923 makes a lot of sense wave-wise and TA-wise, we'll just have to wait and see how futures and such and Monday's opening plays out. This would be easier if I gave an update on Monday morning at around 9:25 am, but alas, its just after close on Friday.

Bottom line appears to be this: The SPX is knocking under the 950 hardcap resistance. Its knocking on the door. Can the bears keep him out? Place your bets.

My "thesis" is that breaking 950 will happen and trigger a final shift in market sentiment to ultimate bullishness (with the daily DSI over 90+) , and it makes sense for P2 to do that very soon.


  1. 975 is the top for next week, if channel holds. Chart:

  2. Dan, Great work. Are you buying any shorts or waiting? thanks.

  3. From EWI's short term outlook of 6/3/09:

    [Bottom Line]: The market either completed its post-triangle rally at yesterday’s highs, or should do so with one more modest new recovery high. The forces for a large selloff are building.

  4. Nice chart Dan.
    The 5 Waves count ends today.
    Market will move lower next week

  5. I own a slice of QID, I am starting to build a position.

    I just think a blowoff euphoric 9000 DOW is in store and a decent (temp) move over 950 will squeeze the shorts a final time.

    I am looking for DSI in the 90's.

  6. I think monday-thuesday could pop up. Not really particular interest for that spx but eurodollar reached enough for first a with ~1,3900 and most commodites follows it like a rat in the tunnel.

    So beautifull plunge today ;)

  7. little pop probably monday to end 3of 5$SPX&p=5&yr=0&mn=1&dy=14&id=p85065311879&a=169877595

  8. Daneric, thanks for the great work

    Is it possible that this was only the A move and coming soon is not P3 but only a correction before the C move up to 1000-1100? Or is that way off base?

    The only reason is because P1 was 17 months, and P3 would end up being like 3months. That is so short. not even the 21% Fib level.