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Monday, July 20, 2009

Elliott Wave Update ~ 20 July

Bulls got their close above 950 and NADSAQ above 1900, so indeed I think that is a strong signal out to the Stock Market world. I could easily say the market will soon (if it hasn't already) peak in an A wave, get a B wave pullback and then the rally toward 1000 will commence to complete a triple zigzag from the 666 low and just leave it at that. Thats the basic gist of where I am coming from.

But what the heck lets just see where A wave might top out at. Kenny put up a nice intraday chart and mentions he didn't see a Minute [iv]. I tend to agree that looking at the wave structure from an hourly chart, you really don't see anything that stands out.

I re-drew the subwaves a bit on my 5 minute chart. Its a tough call on where the A wave will top out, I don't think it knows just yet! But either we are in the midst of a Minute wave [v] to peak or a bullish (b) wave in some kind of (a)(b)(c) move for Minute [iv].

I'll take a stab at the 1 minute squiggles and post later on some of the better current count options.

Regardless of exactly where the wave structure is at [either still in Minute iv or the later stages of [v]), we have to look at pullback spots. The nearest strong support area is 927-934. I think that is a key level to look at for at least 1 pullback maybe 2 over time.

This is the bulls charge to a summer P2 rally peak and if they do not hold the 927 marker, it kind of damages all the work they accomplished in such a short time. At least thats how it feels. Suddenly a trip back to 914 seems damaging in the effort to make 1000 (if thats where we are headed). I dunno, I'm just rambling thoughts out now...

Good luck all!


  1. The only thing that worry me is what if it turns out to be a bull market and most bear just miss it this time?

  2. Keep all the options open Dano ...the game is to send P2 to a maximum and extend it as LONG as possible......look at how they can accomplish both of these objectives to a maximum degree and you will have the ultimate target....

  3. Volume is getting lower and lower as we get closer to 1000. I'll just stay on the sideline.

  4. I am not convinced.

    What it sounds is "Buy on the next pull back to 930 area, relax and enjoy a ride to 1000+"

    Sounds too easy and too good to be true!
    Making money in the market is not that easy.

    It may get there but it would not be a piece of cake as it appears.

  5. Percisely keil. this is what kilguy is saying.

  6. RB, conservative (best) strategy is to remain in cash until P3 begins. You will know when. P3 will provide pleanty of time to make money. I sold all long positions at 850 (mid April) and never looked back.

  7. RBharol the final C wave to peak will not be an "easy" haul I don't think.

    But yeah, if your a swing trader thats the basics of it like you desribed. Problem is one would be trying to time the "top" and that can be very dicey at this stage.

    By the way, I'm sitting out the long side also at this stage. ya never know when they had enough.

    However, overall, they are receptive to earnings season.

  8. I still think a rally into Sept is still a strong possiblity but short term the weekly neckline and B. Bands might stall the rally$SPX&p=W&yr=3&mn=0&dy=0&id=p97526190911&a=172513673&listNum=24

  9. Dan,
    What are the chances of a market crash (20%+ decline in a day or two) to begin P3? Have you given the much thought or study?

  10. Mark, I think a 20% move of 950 = 190 S&P points. I don;t think thats possible.

    It takes the "third of a third" usually to hit the extremes in wave moves

  11. 969 is 1.618 of X wave. I've seen targets around the 956-960 area but for symmetry purpose something closer to 969 will fit best. Then, I am inclined to think we'll have a 1.618 wave pull back all the way down to the 800-810 area by how these intermediate waves have been expanding. However, I keep an open mind and will go long with tight stops when 38, 50, 62 retracements get hit (if we get them at all).

  12. IF HISTORY IS A GUIDE.... JULY 17th to JULY 23rd.

    1. 1981: DJIA having started to turn sharply lower had a short-term bounce, which peaked at 964.80 on 17th of July. By 23rd July it was 4.8% lower and by end of Sept. it was over 16% lower.

    2. 1982: DJIA having started to turn sharply lower had a short term bounce which peaked at 843.80 on 21st July, but by 09 August it was nearly 9% lower.

    3. 1987: DJIA was in a solid bull market, which peaked at a new high of 2520 on 17th July. By 21st July it was 2.7% lower and while it then rallied strongly it ended up in a crash in oct.

    4. 1990: DJIA was in a solid bull market, which peaked at 3011 on 17th July. By 23rd July it was 5.25% lower and by mid Oct, it was 20% lower.

    5. 1998: DJIA was in a solid bull market, which peaked at 9413 on 17 July. By 28th July it was 6.6% lower and by mid september it was over 20% lower.

    6. 2001: DJIA hit a corrective high of 10758 on 19th july. By 25th July it was 5.5% lower and by the 21 September it was over 26% lower.

    7. 2002: DJIA hit a corrective high of 8765 on 17th July. By 24th Juy it was 13% lowr and by October lower still at the base of the bear market.

    8. 2007: DJIA hit a trend hih of 14022 and on 17th July. By 01 August it was 6.3% lower and by mid August near ly 11% lower.

    9: 2008: DJIA had started to move lower but began a bounce on 15th July. On 23rd July it had a quick 3 day fall of just under 5%. It then rallied again into 11th August but ended up in a crash in Oct/nov.

  13. >I don't think that's possible.

    Haven't read 'Black Swan' eh? A major problem in the Middle East, Korea, or a terrorist act could kick off the move down. Really big moves down, like the primary 3 that we are discussing, do not occur without a world-impacting event. It will be a 'surprise' for most people and create panic.