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Thursday, July 23, 2009

Elliott Wave Update ~ 23 July

Well upside surprise indeed! I think, in the big scheme of things, that the market was tracing triangle (ascending on the SPX cash index and e-minis-all hours) waves for Minute [iv] these past few days. Regardless, the market thrust out and finally broke that 950-area monkey. Thrust moves sometimes do not produce a big fat, easy-to-count-5 wave structures. Sometimes its just that - a thrust. If the triangle was about 20 points wide and you add that to the upper line, you get a target of about 979 which is what it hit today.

There is a an awful lot of "skipped space" between 959 and 972 that really hadn't been traded in and I suspect it will very soon. So a 959 backtest, at the least, seems in the cards and probably soon.

But regardless, I provided 3 charts at various time levels. I have labeled it in the best count I could and won't try and outguess the structure (via a thrust move). It would seem Minute [v] is playing out and it *should*, in theory, have one more small recovery wave up left to trace. But anytime a thust move occurs out of a triangle, sometimes thats all you get is a thrust move.

Technically, the daily tick is very high and yes, there still exists negative divergence on the hourly chart confirmed by MACD.


  1. The friggin' P2 top points dead square at October, as usual. I wonder what the downside catalyst will be?

  2. Well, congrats. I think you won the debate with Kenny, as well as, doubters such as myself.

    Indeed a very impressive move out of clear blue. After hours has given back 1/3 of gains.

  3. how bout the gap at 909. also fed auctioning off 268 billion next week. here is my post from the other thread

    can't fundamentals trump technicals? MSFT and AMZN are fairly huge bellwhethers. not to mention the fed is auctioning 268 billion in treasuries next week. they need this market to hurry up and tank. It needs to start by tomorrow to be near 909(the gap) or lower 875 by the time auctions start tuesday. the fed can pull the plug on liquidity as it looks like they already started today as the dollar rallied hard. The fed will get what they want. They need the market to tank and they did it in June for the last big auction. they need it to crap big this time as this is by far the largest auction. they need a lot of money ready to buy those otherwise they end up buying back a ton like they have in the past. if the market is up here you can bet they have to buy back 75% of them themselves!

  4. Of course they are gonna tank the market here ..strengthen the dollar and auction all those worthless treasuries......hehe...its almost like shootin fish in a barrel......

  5. Question:

    Why would the Fed want to strengthen the dollar and increase the price of Treasuries just before a huge auction?

    That doesn't make any sense at all.

  6. >impressive move out of the clear blue

    Not in my book. The EW software that I use (MTPredictor) clearly indicated a long entry at yesterday's close. It underestimated the upside but I don't use its profit targets.


  8. Just an FYI...

    The Treasury Auction that starts tomorrow with $30 billion in 70-day cash management bills is for a total of $235 billion; of which $120 billion is of essentially short-term bills. Not a big deal in my opinion. That stuff will get gobbled up like a nice big juicy turkey on Thanksgiving!

  9. dan, appreciate the work as always. that said i've got bear market highs on breadth thrust, nyadv, nyhgh, tick MA and am reading headlines on yahoo saying dow 15000, and you're telling me we only pull back to 935 before another launch? no freakin way (with all due respect). if you want to play the P2 angle, at least give intermediate (A) conclusion (with (B) to come) it's respect because of the rarity of triple zz. all bitchin aside, great work :)

  10. I think we at least cover the gap at 909.

  11. as crazy as it seems that is what i'm seeing, using the Dow composite a "1" or "A finishing on the 21st, then and "ABC" to the 23th maybe a small pullback friday but 1000 on the S&P seems likely (this chart is the Dow composite )weekly charts look much tamer.$DJA&p=15&st=2009-07-08&en=2009-07-24&id=p81856493487&a=173437691&listNum=38

  12. JB see my sentiment update post for your answer. Its only just getting warmed up (sentiment)

  13. The 10 day MA is coming through at 937.91 SPX. That also just happens to be the same handle that a 38.2% retracement of the upmove would come in. (937.29)

    Anyone thinking that today's high holds up would obviously look to the 937 handle for the first target during any kind of pullback.

    The Investor's Intelligence Bulls/Bears numbers that came out yesterday were basically "unchanged" from the previous week at... Bulls 36.7% and Bears 35.6%

    That's not a very bullish crowd.
    And certainly not anywhere near the number of Bulls ( 47.7% ) back on June 10th at the previous high.

  14. From the looks of Dan's updated SPX chart, we could very well see the end of Wave (iv) tomorrow morning at the following retracements before a final Wave (v):


  15. eegads, if that Triangle scenario is correct, what you have labeled as pink iii (2pm today) on the third chart, could also be infact be a i of 5 no?!

    Thanks for the charts, has been one interesting wave for sure.

  16. Thanks DE. You know where I stand.