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Friday, July 31, 2009

Elliott Wave Update ~ 31 July



There a lots of ways to count the moves from the Thursday high of 996. My squiggle chart shows just one possible way. I do like it best though. I am putting myself on the line by charting this squiggle count because it implies that Monday could be a breakaway gap down opening that might not look back or perhaps a quick pump (fulfilling a small subwave up for black ii) and massive dump. So again, buyer beware and do your own diligence when it comes to interpreting the market moves!

The leading diagonal I charted often happens off the top of significant market tops. It forms because there are still laggard bulls rushing in at the end. Yet the subwaves of the leading diagonal are clearly impulsive down. Today's lazy subwaves up is also more late-comers to the party. Its the end of the month and lately the "new month selloff" has not worked. However the market likes to alternate so we may now be due for a start of the month selloff.

But again, the important part is that the market is starting to clearly sport some clean 5 wave structures down and that I think is cluing us in on the change in direction. It hasn't done this since the 869 low so its a bit of evidence that the corrective Minor B wave has started. Monday should give confirmation. If not, well sheesh....bulltards hehe!

30 comments:

  1. Thanks Dan.

    Especially for your final paragraph about those "clean 5 wave structures down" possibly being an early indication of a decent-sized minor B wave correction. Love those detective clues! :>)

    Have a great weekend.

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  2. Always great analysis. For my portfolio's sake, I hope you're right.... Have a good one.

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  3. Unlike 'ending diagonal' in a fifth wave; I have not seen the concept of 'leading expanding triangle in the first wave of a five wave move.
    Where do see that in EW book?

    Ravi

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  4. Ravi, page 40 under "Leading Diagonal". It also states they usually only occur at the start of a significant decline.

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  5. thks much Dan for your great work.
    Are you short at current level ?
    What objective do you have on the downside ?

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  6. I hope to share with everyone here an important link I got on StockTock from "i report, u decide."

    Let's see if Blogger will let me paste it again after I post this.

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  7. http://business.theatlantic.com/2009/07/mark-to-market_is_back_--_with_a_vengeance.php

    Yup. Crazy software.

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  8. this has been out there for a week if not 2 now.
    it's been mentioned on CNBC etc. the fact that it's only been mentioned tells me that the bigwigs aim to strongarm FASB again this fall to keep the rule as is for now.

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  9. Dan, have you been watching the Dollar?! Almost unchartable..erratic, confusing. A messy bottom? And then an ABC with even lower lows?

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  10. It could be a messy bottom like the last bottom in early 2008.

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  11. Alex yes went short at about 994 yesterday with SDS. (I was going to double it if it popped above 1000 - but it never did) Am holding and hoping for 950-956 area.

    I also shorted Apple at $164 even. I dunno. I think I did that on a whim.

    I'm trying to get away from ETF's. They may be more dangerous on P3 down.

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  12. Absolutely brilliant Dan, if it proves true! MACD does not look in a position for a gap down, but a small rally. My analysis indicates a small rally to 991 Monday then a collapse...that is if your analysis/count is correct.

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  13. Aaron,

    I was mostly on vacation the past two weeks, so I didn't see this market-to-market news until today.

    I agree with you that the bank lobbyists and their bribed Congress-members will probably block the return of M2M -- but if it does come back, financial institutions might decline again (and drag the markets down too). Something to watch.

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  14. Dan, charts suggest there may be a rally before collapse

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  15. Dan,

    I was thinking of using inverse ETFs for P3 until the 700 level. After that, shorting SPX or carefully selected company stocks.

    I know that ETFs counter-party risks and financial institutions' risks make ETFs in danger of default if the P3 crash goes too far or too fast.

    Are you planning to forgo ETFs from the start of P3, or only after a certain level? What will you trade instead of ETFs during P3?

    Thanks for sharing your ideas.

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  16. Dan if we do get a pump, whats your target to the upside before your 3 comes?

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  17. great work as always, i see what you're seeing

    i think many are looking to buy the pullback to 950, i'm favouring an overshoot to fill the gap in low 900's...sharp fast decline over the next two weeks...then perhaps onto 1100

    cheers

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  18. Dan - As I posted on the previous thread in the last half hour, I am inclined to lean towards this count as well given the "sloppy" 7-wave structure that we saw today and the 78.6% retracement up to 993.18 that occurred in Wave (ii) before the sell-off into the close.

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  19. P.S. It has been 144 calendar days since the March 9th low. Gann anyone?
    :)

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  20. Dan you said:

    I'm trying to get away from ETF's. They may be more dangerous on P3 down.

    Can you explain what is P3 Down stage is and why it is dangerous.

    Thanks

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  21. wags,

    saw that last post but ran to a mtg so couldnt respond. great call!

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  22. Thanks WaveTrader!

    I'm seeing several time divisions here which is quite rare. Check this out:

    The rally has been +46% off the March 9th closing low of 676.53 to today's closing high at 987.48

    For you Martin Armstrong fans out there, now take "pi" of 3.14 and multiply it times 46.

    144 :)

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  23. This fellow, Ray Merriman, uses cycles and financial astrology. He says the crest will be September 15th, hence, perhaps the end of P2:

    What does this rally in world equity markets tell us from the perspective of Financial Astrology? It suggests that the Jupiter-Neptune conjunction in Aquarius (May-December 2009), in mutual reception to Uranus in Pisces (January 2009-January 2010), has been a correlate of great hope regarding the economic and banking crisis that struck the world just prior to the Saturn-Uranus opposition (November 2008-July 2010). Two of the three passes of the Jupiter-Neptune conjunction have now been completed as of July 10, and the market is still rising. That may be due to the fact that first Venus, then the Sun and Mars, are still making a “translation” to the Jupiter-Neptune conjunction. Venus did so last week, while both the Sun and Mars will do so August 13-17. After that, we head back into the minefield of the Saturn-Uranus opposition, which happens five times between November 4, 2008 and July 26, 2010. The third of the five passages of this 45-year cycle will unfold on September 15, with the new moon hitting that opposition just three days later. The first two passages (November 4, 20087 and February 5, 2009) coincided with what cycles’ analysts would label a “major cycle crest.” They were highs from which severe 3-4 week declines followed, and the DJIA dropped approximately 2000 points both times.

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  24. it would be nice to count it somehow without an expanding diagonal. What if that's a double zigzag for (a), the beginning of a flat. Now we're in a combination (b), having just finished b of (b).

    Disclosure: I took a position in BGZ earlier today, thinking we were about to see (iii) down. However after all this sideways action I'm not convinced that we're about to enter a (iii) down. Instead worried, as above, we will go up to finish wave (b) of the flat before a five-wave (c) down. That would mean a pump to challenge (or break) the established high, before the dump.

    kevin

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  25. GS HAS LED THE LEMMINGS ON TO THE TITANIC NOW AND SHOVE IT OFF THE DOCK TOWARDS THE NORTH SEA FROM NYC HARBOR

    NOT MONDAY MORNING BUT I HAVE A FEELING THEY WILL PUT MORE LEMMINGS IN LIFE BOATS TO GET THE FULL EFFECT AND THEN PULL THE PLUG TUESDAY OF WEDNESDAY

    LONG 5000 SPXU
    LONG 40000 SRS
    LONG 10000 FAZ
    75% THERE AND GO AS YOU FELLAS SAY BALLS DEEP MONDAY OR TUESDAY TO FULL PENETRATION

    DAN THANK VERY MUCH FOR YOUR HARD WORK

    IF THIS WORKS WATCH YOUR DONATION BUTTON

    SINCERELY

    ONEDUMBASS

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  26. spg and vno report BEFORE the open on tue (ie SRS)......

    fwiw

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  27. Eric spg and vno should stink it up so watch GS squeeze the chit outta da shorts after they pile in.....hehehe....those boyz play ruff...hehe

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  28. Dan, Thanks again for all of the charts and analysis! I am carrying the corrective option (that we are still in 4 of 5 of A) and that Thursday's action made a zigzag-X-flat. I have that count shown here: http://caps.fool.com/blogs/viewpost.aspx?bpid=236255 in comments 22 and 23. Please let me know if you consider this spam, and I will refrain in the future! Just wanted to share an alternate count (which I am sure you considered). Thanks!

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