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Wednesday, September 9, 2009

Elliott Wave Update ~ 9 September

The first chart shows what an ending diagonal may look like for Minor C. A Minuette (b) wave pullback to close the gap up at 1016 or so would be nice. Throw the bears a bone would ya? heh. The reason I suggest an ending diagonal is that it, so far, fits the pattern of advance/decline volume ratios I show on the second chart.

The advance/decline volume ratio chart I posted shows how as the market keeps making new highs (NASDAQ), the peak ratios are lower and lower. Upward momentum is waning and the indexes still sport huge negative diverences.

The VIX chart shows a little falling wedge pattern which lately has been reliable for a decent move up in teh VIX and a move down a bit in the indexes. With only one of 3 indexes making a new high that is usually a bearish short-term development. The market was fractured even more so today than the last 2 days. At one point the NASDAQ was almost a full percentage point ahead of the DOW. It ended fractured between all 3.

FTSE 100 closed over 5000. Nice target = met.

I have no idea if an ending diagonal will play out as I have mapped but so far, the technicals support that pattern. Perhaps the whole move from the 868 is an ending diagonal and the SPX and DOW need only make a new squeaker high. Then it all falls apart.

I am looking for a decent down move tomorrow, with a chance of it being a huge move. Stockchart show a nice 5 wave structure down from the intraday peak. The end of day retraced back up a bit, but the 5 wave move is still intact even on the e-minis. Stockcharts is down right now so I'll post it later.

Remember my post about the double tops and divergences between indexes at highs.

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