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Monday, July 27, 2009

Elliott Wave Update ~ 27 July




Ending diagonal or wave (iv) of [v] triangle? For the SPX and DOW, I think the ED works well. the NASDAQ may be in a triangle.

Either way I'm not going to get too worked up about it all as both patterns imply we are near the top of Minor A.

So whats the difference between and ED and a potential triangle? I think an ED could be a pump and dump. An Ending diagonal can collapse hard and rip the bulls' faces off at least for a day. I smell a day like that coming. The MM's have had their way with shorts and I see the CPC is again low so we are due for that B wave pullback.

If its another wave (iv) triangle, then this thing could take 980 and using it as support, launch a run higher up into the low to mid 990's, perhaps an assault on 1000.

So the difference between an ED (pump and dump) and a triangle (5 more small subwaves to a peak and it could run for another day or so) is in the degree and price targets.

I see lots of negative divergence happening so I lean toward a quick pump and dump ED scenario. But be aware of both patterns.


70 comments:

  1. I think that it will be either the jobless claim on Thursday or the GDP on Friday that trigger the correction this week.

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  2. AG is up so much today and after hour. CF beats and stock jumps almost $3 dollars. Based on the housing data today, I won't expect a bad Consumer Confidence report tomorrow. Most of the good earnings this quarter came from cost cutting. Maybe the GDP will the the key to trigger the correction.

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  3. Dan, any chance we never see 1000 on the SPX, now that it has become the consensus view? Always expected it to reach the 1013 to 1050 target but just throwing out this thought given everyone now is expecting that to happen?

    $BPSPX also seems to be closing in to the top and with USD in the last leg, do you envision that we just stop short of that magic number?
    Thanks for all the charts and commentary.

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  4. P, beats me. Depends if a pullback holds 950 or not. I suspect it should or be very close.

    But I do see one more advance after a pullback. It could be choppy too.

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  5. Mandy you assume the news matters look at how the market traded today with all the good news....the only thing that matters is how GS is going to move it.....THEY are your market ....I would expect the longer treasuries tomorrow and wednesday to have an impact on where THEY may take your market..which would correspong to a nice b move

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  6. Thanks Dan....I guess it should be clear in a week or so...as you said if the last leg has to have a significant run it has to come from financials...don't see any other sector driving us to frenzy

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  7. Today was a very solid consolidation day for the Bulls.

    One has to look no further than yet another bullish day of A/D line stats at 2373 UP and 1355 DOWN. For me, this is quite telling as it continues to indicate that this is not merely a narrow advance that will collapse straight back down, but one that will most likely enter a "pullback" to shave off some overbought levels and will surge yet again.

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  8. Wags - I'm with you. I've been burned many times trying to play a pullback when the market is actually consolidating just to springboard higher. If we don't get a decent pullback here it's up we go.

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  9. I agree with Wags's analysis as well. I do expect to see a pull back, but will be a mild one and surge higher again. I don't expect a huge correction down.

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  10. Well well well, finally one red day.

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  11. what do u guys think? ed or triangle? i'm thinking triangle

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  12. mark, do u have wave e wrapping up now?

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  13. WT,

    Undecided but sticking to ending diangonal for the spx for now. The nasdaq looks like a triangle forming however.

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  14. im thinking we could be impulsing lower now

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  15. onechi, this is starting to look like a wave 3 on a new impulse down?

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  16. WT,

    It looks to be that way, however there are so much support below. BPSPX hit 70 yesterday, close to a high of 74.80 back in May.

    I wouldn't rule out the triangle yet. The E wave can surpass the C wave low no? As long as it looks like a 3, I think we are still ok. We havent seen an extended 3 yet. What are your thoughts WT and mark?

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  17. wt. i agree. still early to tell. e may still be valid. good call yesterday by the way on this formation (ed/tri).

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  18. hmmm. if wave e is still in play. i'm counting 5 subwaves for wave c or e.

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  19. i meant "of" e, but it's starting to look pretty impulsive

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  20. This comment has been removed by the author.

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  21. Keep a good eye on the OIH.
    This is a leading indicator!!!

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  22. this rally over, we are in B

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  23. WT,

    Wave C of triangles as said in EWP are usually complex waves. I see the 5 for C wave you are speaking of. But could the C wave have been an ending diangonal within the ending diagonal? Is that possible?

    The E is starting to look impulsive.

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  24. thx wags. oih is looking like it's impulsing down

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  25. Onechi,

    I'm not sure. so far this could be the thrust up or a w4 of a new impulse down.

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  26. WT,

    Oih does look like an impulse down with 3 extending.

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  27. a zz is in process from today's 969.35 low.

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  28. WT,

    Were you able to label an impulse down from the high this morning? I'm seeing a double ZZ or a ZZ.

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  29. onechi, not quite because w3 was shorter than w1 so far. if this is impulsive, the correction thus far from today's low is possibly a w2 of 3.

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  30. i have feeling the correction from today's low is not a correction and could be the beginning of v of v.

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  31. I guess my count was right after all. It is looking like the top was at 984, then A @ 972, B @ 982 and now C @ 969. And now we are on the X wave or 1.

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  32. The 2-year Treasury Note auction is over with. $42 Billion done. Stocks coming back off the lows.

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  33. Breaking of today's lows confirms an impulse down and yesterday's high an impulse going up.

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  34. safe to say this is the final push to complete v

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  35. I posted my current count on here:

    http://elliotwavetrader1.blogspot.com/

    On the 5 minute chart, I see the peak yesterday and we are currently on an X or 1.

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  36. nasdaq about to thrust thru the triangle

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  37. WT,

    Dow also shows that the triangle is complete with an e wave low of 9007. If this is minute v, it is moving awefully slow.

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  38. no kidding. these usually thrust up.

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  39. We'll be able to tell if there is more upside left after the Fib correction. If we get a Fib correction and then the x wave turns into a 1 and that will leave room for more upside. However, if the wave corrects below 969, it means the much anticipated B wave is upon us.

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  40. WT,

    The form for the triangle looks good for the Nasdaq and the SPX. We might only be on the D Wave of the triangle now. However the Dow doesn't look like a triangle anymore, the only other way of looking at it now for me is a complex correction forming a channel as minute iv.

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  41. it is possible. i did question the length of wave c. however this could just be an expanding triangle with e complete.

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  42. where will this market end? getting ridiculous. i don't understand ew but can someone give me a laymans description of where this thing ends.
    tx

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  43. Yep, here we go.
    All aboard for a minimum target of 987-988
    :)

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  44. onechi, perhaps that was ur wave d?

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  45. Whatever wave this is X or 1, seems like it peaked now I am watching the Fib retracement or the take out of the 969.

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  46. Ok we got .382 Fib retracement on the wave, the next hour or so will decide if we have more upside (if this wave turns into a 1) or we are now on the B wave.

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  47. EWT
    does that mean you are going short now ?

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  48. Actually, I was hedged yesterday and part of today but when the count became clearer I sold the long position. I will only buy it back if the peak of the recent wave gets taken out, which is not looking likely to me but my trigger order is there just in case.

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  49. thks much EWT
    what is your target on the downside ?

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  50. I expect upside target of 1000 tomorrow

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  51. It highly depends on this wave right now. If it takes out the peak, it means more upside so the number change. But if it holds and 969 gets taken out then 910-940.

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  52. I guess we'll have our answer tomorrow. I am hedging or going long at 981.50 or adding to my short position at 968. Alternatively, to play it more conservatively 965 would be a TA point to short too.

    Everybody is calling for more upside now so that's not a very good sign for longs. And I guess remains to be seen which count is correct. Dan's, Kenny's, or the potential expanding triangle that I see as a possibility.

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  53. Even the biggest "Gloom & Doomer" Marc Faber is still bullish on stocks... especially Asian stocks.

    http://www.youtube.comwatch?v=DuyL8c_m7Wg

    Greenspan and Bernanke came to the rescue to avert the start of "Winter" back in 1998 and 2000. Looks like Faber is implying yet another "Bubble" in equities given all of the recent stimulus by Helicopter Ben!

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  54. NV, finally someone who sees what i see,

    http://stockcharts.com/h-sc/ui?s=$SPX&p=30&yr=0&mn=0&dy=20&id=p18948248778&a=173845168&listNum=12

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  55. What do they say about ascending wedges?

    http://4.bp.blogspot.com/_l8gHrhQiXlE/Sm8jFjysLaI/AAAAAAAAAfM/cXAtOIrlXJI/s1600-h/afl.png

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  56. is it the same as a head & shoulders bottom?

    http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=1&mn=0&dy=0&id=p35838895211&a=172729518&listNum=12

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  57. Looking at TA alone I see the potential for a hard sudden reversal. I am not so sure the resistance points will hold.

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  58. Take a look at this:

    http://4.bp.blogspot.com/_2IV2qZlbgks/Sm94fDPqPHI/AAAAAAAAAHw/u3kFzpInqm4/s1600-h/chart.jpg

    or

    http://elliottwavetrader1.blogspot.com/

    The RSI looks scary for anyone going long. Usually these things correct hard.

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  59. According to EW count, the market may gap up to finish V and then reversal down in ABC pattern.

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  60. EWT, history tells us that RSI can stay overbought for a long time, http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=1994-12-28&en=1995-07-09&id=p83474765825&listNum=12&a=174072439

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  61. MAXCHERRY123, You have to look at the daily RSI. More often than not they tend to be accurate. On my chart look what happened the last two times similar levels where reached.

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  62. EWT--- Looking merely at the RSI or the Stochastics can be extremely dangerous to your financial health. For example, check out such indicators off the July/August 1982 lows and the subsequent action into 1983, or the move off the 1990 lows.

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