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Monday, July 13, 2009

Elliott Wave Update ~ 13 July

Well my call for 869 as the (X) wave low http://danericselliottwaves.blogspot.com/2009/07/elliott-wave-update-8-july.htmlis on firmer footing due to the advance/decline volume ratio ending today at 10.25 at the high. That makes it easily a 90% up day I believe. The most since the middle of May when the market originally broke upwards past 930. So that was certainly bullish and will cause the bears to doubt their positions. I expected a backtest of mid-890's and that happened. The ending on today's high paints a bullish picture.

My primary count is that a final giant 5-3-5 zigzag to P2 peak will form off the second red (X) wave low. So its a matter of counting the first 5 Minute [v] waves up, finding the blue B wave correction and then another [v] waves up. I have today labeled as only pink Minuette (iii) of Minute [i] so as you can see, the market would have a ways to go if the degree markings are correct. A summer rally that takes 6-8 weeks. But thats getting ahead of myself again.

I'll have a squiggle chart later.

What if 869 was not the second (X) wave low? Well, look for another 5 wave move down or a 5-3-5 structure down to a new low. How bearish a move is up to the market however I look for a low to hold above 840-845 because I don't think a final rally to P2 peak can happen from a low spot and make it back to the high 900's or 1000.

However a 10-1 up day does not bode well for the bears. That's some real buying right there and was the upside surprise the market needed. The last [b] wave rally from 888 to 931 had an 8-1 up day in there but it did not hit that magic 9-1 spot and the rally was more ragged. And it failed eventually lower.

So we will see. Market needs to follow through some more and any pullbacks need to be on lighter volume.

13 comments:

  1. We should expect a down day tomorrow.

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  2. Dan, thats a good point above the a/d line, I look at just the advancing issues to get s feel of the underlining market and it never confirmed the recent low and is now on the verge of a break out. i still would have liked to see 865 today i'm like a dog with a bone with these price and time relationships.. good work on your part.



    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p94292422085&a=160462960&listNum=12

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  3. I won't be surprise if the market gap lower on Tuesday. Look at the Tick

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  4. P2 will destroy only the wisest of traders trying to short it......when P2 is over then P3 will begin the process of destroying bull wealth....as the BEAR of all bears plays out I suspect that virtually all traders will be destroyed....GREAT call dano

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  5. It may have been 90% up but it was low volume. Every high volume bar on my ES chart was a down candle. Oscillators were diverged all afternoon. I'm not 'buying' it. :)

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  6. kil is right...all market players lose in bear markets. sitting in cash also kills as there is no return which forces people into risky investments. this is why gold will be of such value in years to come. gold <800 in the months ahead and the buy.

    all that said, I agree that the last rally will take 5-6 weeks however I think it begins in early august and from a low 800 number. we'll see.

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  7. "H&S pattern is the most reliable technical patterns and will play out 90% of the time" said by Prechter

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  8. Goof call Daneric,

    Sorry I did not believe you until now.

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  9. in a market like this dano has more credibility than t/a alone.....GS IS the fkn market and are using t/a to destroy both sides don't be lured into the spider web by t/a they will grind you to hamburger

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  10. I'm going with alt [b]. It's common for a H&S pattern to retest the head. This is a very strong, reliable pattern. I agree with the count based on pattern. This is corrective, not motive. So once this downside plays out we will have another leg up. Could be a very weak C-leg though. Might not even take out the highs of June.

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  11. the market needed a reason to rally and the news on GS was it's catalyst. that being said, nothing has changed fundamentally in the market. based on dan's labels, i think we start wave alt [c] tomorrow after goldman's earnings release. but what do i know, we shall let the market tell us.

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  12. >we shall let the market tell us

    heh. I think one of the last hurdles for a trader to be profitable is to stop believing forecasts, especially your own.

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  13. no disagreement there Michael. there is a difference between what one wants the market to do and another thing when it comes to what the market wants to do.

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