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Wednesday, August 19, 2009

Elliott Wave Update ~ 19 August

Pretty good call for 1000 huh and a partial gap fill huh? It peaked at 999.61. I wasn't sure last night and neither was the market as it tried to gap down but buying support came in prior to making new lows. At that moment there was very clear positive divergence on the hourly and on the e-minis all hours.

I do not consider the move down today as a "truncated" 5th. It doesn't fit really. A truncated 5th occurs when the proceeding 3rd wave down "moves too far too fast" and I don't think that's really the case here. So overall the move from 1018 to 978 bests counts as a "three" zigzag (flat on the e-minis all hours).

Could it still be a series of 1's and 2's? Well not if this is a B wave and we are looking for a C wave to peak sooner rather than later. It just works better as other things at the moment even when or if another bearish move may come and even if it makes a new low under 978. So until a "super bearish third of a third down" happens, I have to assume it will not because my larger count (Minor B wave correction) suggests a shallower pullback than a massive bear wave down.

My primary count is that this is a Minute [x] wave up, which is the "connecting" wave of a possible "double three" correction for blue Minor B wave. I find that [x] waves look like hybrid waves that has many elements of the entire EW spectrum of waves. The intraday waves from the recent 978 low can count many ways. But looking from afar, the entire correction up has a "zigzag" look which is what X waves usually count best as.

If one more move to a new high occurs tomorrow, then it actually counts best as a 5 wave move up.

What if the recent 978 low was the B wave low? Well then we can look for a 5 wave move off the low. So far I count 4 waves up from that low. If tomorrow makes a new high, one can argue that it would be the top of Minute [i] of Minor C to P2 peak. So I am highly interested if the market makes a new high tomorrow, even if only briefly and then pulls back hard in a Minute [ii] back down. In fact, it has an excellent chance of doing just that.

The BKX looks like its making a 4th wave triangle. I may have the [d] wave labeled too early. A break below the [c] wave low would invalidate my count as I have it labeled.

So all in all today was likely an [x] wave up or part of a Minute [i] up of Minor C. Its open to further speculation but looking at what actually has traced so far, one of these 2 interpretations counts best.

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