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Tuesday, July 28, 2009

Elliott Wave Update ~ 28 July


Nothing too insightful to add to the mix tonight, just ramblings as usual. The triangle is intact and lots of zigzags up and down. No clear 5 wave moves either way (other than the subwaves of a lot of 5-3-5 zigzags). It looks and acts a bit on the weak side but I cannot say whats going to happen. I thought an early pump and dump would happen today and indeed it did spike and then sold off a bit, but still nothing too awful and buyers kept on buying the dips.

Triangles like these are a bit unpredictable as they happen so high up in the rally that they signal the final actionary pattern of the move. This one is not a tight one either. Its more on the distributive side of things to describe it in a way. So in any case, the move is almost over. B wave should be coming in some form or fashion. Whats not clear is how much buying power and squeeze power do the bulls have left in them. Its not even clear yet that the triangle will prove itself to be a triangle.

A 980 break to the upside will take some volume. Volume picked up today indeed yet it only managed to produce a "hanging man"-type candlestick pattern. Longer-term technicals are indeed bullish, but bull market this is not just yet. Its just the sharpest rally yet of P2 and VIX, in case you haven't noticed is still mid-20's not sub 17! So a down move can come out of the blue once all the buyers have been exhausted. And believe me the MM's will rip your face off in a slick 30 - 35 point move down if they can get away with it. There are stops to the underside of 969 that are growing too comfortable. 950 - 956 support has yet to be tested.

Even if the SPX makes a break above 980 and tests higher targets, I don't see 1000 taken out or held prior to a pullback. It may be tested, and if it does, I look at it as a tremendous opportunity to go seriously short this thing and look for a move back to 956 at least. But 10 points shy of the obvious seems to be the way the market works and 1000-10 = Kenny's 989 target.

Also there is a H&S in play on the SPX after all. We'll know more by morning. The e-minis don't make a good triangle they actually topped early on at 984 overnight a few nights back. They are actually more in a H and S mode more than a triangle mode.

70 comments:

  1. I'm trying to picture a bearish count with a 5 wave impulse topping around here to complete wave A, but I just don't see it. It looks like a clear triangle to me. You're right, perhaps (e) has not yet completed.

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  2. Based on the technicals and the wave count I have, I see a H&S. I have the peak at 982.49 for 5 and an abc and an x or 1 that should be resolved tomorrow. I posted that chart on my blog, if 969 is taken out (with confirmation at 965) we will be officially on the B wave.

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  3. B wave sends us to around 930 correct?

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  4. Don't for get the longer term T bills tomorrow...that would be a nice kick in the pants for the market.

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  5. Dan,

    What do you agree on with EWT's post? Do you agree on his count or breaking 965 confirms wave b? Or both?

    Thanks

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  6. Bullish percents back at overbought and their RSIs are back over 70 so combining this with the strong daily and weekly MACD divergences it seems very plausible that the 2009 top is in and the bulls won't get their 1000+.

    It would be just like this market to F the bulls as well as the bears.

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  7. Wavetrader i agree that 965 is a key "marker" that if broke will signal more weakness and a b wave pullback.

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  8. i believe i have wave e completed. lets see what this thrust looks like.

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  9. i will add that this could possibly be a wave iv of a new impulse down. if if climbs past 974.66, it will invalidate this potential (that is is an impulse down) and confirm that we are seeing the final thrust of the triangle/continuation of the triangle.

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  10. hope to reload shorts at cheaper level

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  11. We should know in the hour or so if this a retracement an impulse down or a trust to break the triangle.

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  12. If 969 gets taken out, it validates my view that we topped couple of days ago thus confirming the H&S which is what I am inclined to believe (and where I put my money).

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  13. too many buyers, should they be cautious?

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  14. EWT. I know there are several potential counts out there.

    I've been scratching my head all last week trying to figure this out. I guess in the end, all that really matters are the two levels that would help confirm things for us; the 965.95 low and the 982.49 high. GL!

    Until then, I'm still waiting to load up on some shorts. I hope that can be done today.

    I have a feeling that may be possible.

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  15. buyers should be cautious but it would play out well with this final pattern (assuming we are wrapping up the the tri and thrusting higher). This will suck in the last few buyers before completely exhausting itself.

    with the break above 974.66, i'll say that was not an impulse down.

    let's see where this takes us....more subwaves or final thrust?

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  16. waiting to load up shorts...

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  17. waves are looking impulsive (and clean) from today's 970.13 lows so far. let's see if we get 5 clean subwaves to end this thing.

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  18. these fibonacci projections have not proven accurate for me yet but i will throw this out there. based on the structure so far from this am's low (970.13), there is a little cluster near the 988 level.

    if projecting with fib truly correlates with EW, this level may have some significance for today. Heck, I think that also correlates with some other fibonacci relationships (wave v = i, kenny's projection and etc?)

    i guess we will see.

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  19. Crude oil getting whacked on higher inventory numbers, a build of 5.1 million barrles . . . Down $2.60 and taking the OIH with it. If it breaks key support right around here, we could see $61.00 shortly.

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  20. should higher inventory means higher oil price?

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  21. whats your target for III WT?

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  22. anna,

    i have iii potentially at 980

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  23. the impulse is a little suspect tho. will have to see.

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  24. if oil doesn't drop by $3, Dow will be up 200 by now

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  25. EWT, what is ur count? this is looking choppy, with a bias down.

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  26. I dont think oil will drop $5

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  27. Looks like an ascending triangle to me. H&S here looks a little too creative for me. Plus H&S barely EV positive trades from my experience.

    Toastmaster
    http://tradingwithtoastmaster.blogspot.com/

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  28. depending on this reaction, that push down may be wave e

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  29. Can Wave B be a triangle correction?

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  30. Anna,

    Yes, Wave B can be any corrective pattern.

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  31. WT,

    Everything look so neat for a triangle, a little too neat. This might be distributive like Dan said.

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  32. work is killing me. what did i miss?

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  33. WT & EWT or anyone,

    Do you think this triangle could be the B wave in our ABC correction upwards? This triangle is taking awefully long for a wave (iv) triangle especially since the rally only took 11 days. We are already in the 4th day of triangulating

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  34. Technical indicators are showing that we will head down soon, but we still have not. Is this the extreme bullishness of p2? RSI is at levels before primary 1 start as Schweizer has stated. Would one remaining thrust shove us up into a protracted C wave bring us into ultra extreme bullishness? BPSPX is also at an extreme, almost exceeding the bullishness seen in May.

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  35. ya this triangle is strange. i cant spend time analyzing this now because of my "real" job. will just have to watch the levels. 965.95 and 982.49. GL!

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  36. it's still hanging onto that lower trendline of the "triangle".

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  37. looks like she's ready to blow lower...

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  38. kenny has a good point. a triangle e wave?? that would work based on ew

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  39. Hi Danny, you mentioned that you believe the market is trending to Peak near AUG 24th then down to Sept 15 approx.. For us that are swing trading or have Funds that are locked into 30 days before we can make a move without being hit with a penalty Im curious if you still believe so based upon your comments and if so why so that I can review your data and compare with my data.
    Thanks for any help and insight.
    Joseph;

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  40. Seems to be that we are on wave 1 goin down or on some type of abc again after the X wave put in yesterday which is the one the chart I posted on my blog labeled x or 1. Breaking 965 confirms top couple of days ago and the H&S pattern.

    I would do a chart but I barely got any sleep so I'll do it later.. good thing we have Dan!

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  41. Yes looking at the chart closely I see a double ZZ and this seems to be a corrective wave 2 or a b type of wave again, if that's the case we will see the low of the day broken again or possibly 965 if it's a 5w count.

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  42. EWT,

    We could be in B wave already with some really funky complex correction that would not involve waves 1-5 at all but a bunch of ABCXABCs both on a Minor degree scale to smaller degrees.

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  43. EWT,

    We are also forming a falling per TA for the past 2 days. This would back the triangle for wave (iv) or Wave B.

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  44. OneChi, I see the triangle as well but I made my decision mainly because logically speaking this is should be done already. Most people were calling (up to yesterday) for higher numbers and the RSI on a level that can backfire on longs hard. So I favor an H&S and not the triangle. To me the end of the A wave was 2 days ago and I see clear corrective waves since then.

    With that said, I would cover my short at 980 and possibly even go long if 982.50 gets taken out. But the fact 969 was broken, it invalidated the potential 5w up count necessary to break resistance this morning.

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  45. Falling Wegde* sorry forgot that word.

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  46. EWT,

    I agree with your accessment, things are just too overbought right now and another thrust up we might not even get a C wave.

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  47. The falling wedge is the only pattern left favoring a move up. However, if 965 gets taken out it invalidates the fw.

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  48. We should know about the fw soon. Right now we are on a c or 3 on the minuette, b or 2 was 973. If it's a 5w move, the fw scenario will be out.

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  49. i dont like this kind of market moves

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  50. Anna,

    Because its confusing I know lol.

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  51. I am raising my stops to 973 on my short as that would break the falling wedge.

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  52. A 973 stop is exactly what I was thinking. Does it bother anyone else that we keep setting stops, have them hit and then then markets turn and do what we originally thought they would do?

    Think I will set my stop a little higher today.

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  53. she's looking like she's gonna blow. macd is showing a pending cross thru of centerline at 5min and x

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  54. old timers will tell you "don't short a dull market"

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  55. Well, I set my stops at 795 and lost a lot of my profit, but still ahead for the day. We are getting very close, so this should be intersting.

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  56. I see some fireworks coming in the next 2 days

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  57. Rallying back into the close.
    Nice move up since 3PM.

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  58. Well my stop was for my short position taken at 980 so I had a nice profit on it. I will re-enter again when I have time to take a look at the charts and identify the current wave, which I think it's a Y. I hope it tops 980 as I would love to enter there again or better yet, I hope it was a 3 that peaked couple of days ago and not A so I can load up at 999 :)

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  59. As funky as today was, my count has not change. I think we work towards minute v starting tomorrow.

    I believe that falling wedge/contracting triangle completed wave e. We saw the beginning of minuette v to complete minute v near the close today.

    http://waveprinciple.blogspot.com/2009/07/is-it-still-wave-iv-triangle.html

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  60. I will add that in EWP, pg 49 on triangles, it states, "Wave E can undershoot or overshoot the A-C line, and in fact, our experience tells us that it happens more often than not."

    By my count, wave e today violated that A-C line.

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  61. Kliguy38 - You are misinformed.

    The 13 and 26 week TBills were auctioned off on Monday of this week, with the 52 week TBills auctioned off yesterday. There were no TBills auctioned today, just $39 billion of 5-year Treasury Notes.

    Today's 5-year auction did not go well, but the stock market could not have cared less.

    Thus far, the bond market has ALREADY absorbed $207 BILLION of the overall $235 BILLION auctioned off this week. The 7-year TNotes are tomorrow.

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