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Monday, September 28, 2009

Elliott Wave Update ~ 28 September

Well you all know the primary and alternate counts. Either P2 topped at 1080 or this is now the proper Minute [v] in progress to a new, as yet to be determined, P2 high.

Here are the pros/cons for both:

Pros that P2 has not topped yet:
1) Volume ratio was very good today. Which implies follow through to the upside.
2) Bulls closed it above 1060
3) Tech is still showing strength so risk appetite is still high. JUNK made a new high.
4) End of quarter. They are still bullish (and buying the dips)
5) Micro squiggle waves from Friday 1041 low favor a bullish count to be honest. But it needs to break higher tomorrow to confirm.

Cons (P2 has topped argument):
1) Low volume, probably due to Jewish holiday, resulted in cats away, mice will play.
2) The high today stopped at 61.8 Fib, a normal wave 2 spot.
3) Transports were sick looking dead cat bounce
4) Oil was dead cat bounce
5) Dollar higher today
6) gold lower
7) VIX 20/50 DMA bullish crossover has been a teaser for many trading days and its close to crossing with a hard bear chop.
8) VIX only retraced back down 38% while the market traced back up 62%. Perhaps divergence.
9) Waves are still only in a 3 count up since the 1041 low.
10) A/H's E-minis overlapped [i] and [iv].
11) RIMM couldn't catch a bid still.
12) The MM's didn't even make a head-fake move to close the gap up today.

Of course many or a lot of those things I mention in the cons side of things could very well shake out better for the bulls tomorrow or maybe they just don't matter. Its just what I see as of now.

The market was due for a bounce today. I called for a gap up and a run to 1060 but there wasn't a hard reversal yet so - tomorrow is another key day. And up volume ratio was much better than I thought it could be. So yes this bear has some doubts.

I still have P2 as having topped at 1080 but at least if the alternate plays out to a new high, that should give us a nice entry on a lot of things. There should be a triple negative RSI daily divergence if a new high plays out in next few days. That would align nicely with a P2 top.

Anyways feel free to add your own observations about what and why and where we are headed. We'll know tomorrow.
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