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Friday, September 11, 2009

Wilshire 5000

The Wilshire, being a very large collection of stocks, makes excellent Elliott Wave patterns. In fact, I have started to use it to help me interpret the overall wave structure of the markets.

Notice on the Primary wave 1 down Intermediate waves (1) ,(3), and (5) definitely hit on a trendline. Wave (2) and (4) also. The Wilshire largely eliminates "squeakers" or those wave patterns that break a rule by a half point or so and you don't want to re-do a major count just because of a measly half point. The Wilshire seems to follow the rules pretty darn well.

At any rate that brings us to the current structure. There is definite signs of slowing momentum in the markets. Should it all fall apart, I would not be surprised. Should it all hang in there for a few more weeks of groggy advance, I would not be surprised, in fact I half expect a higher high.

I would be somewhat surprised if the market produced a 10-1 or greater up day from here. However if it happens, it certainly can be counted in the overall wave structure.

The waves are not real clear right now. If we make Minor B to be an upward flat, that would imply that the move from the recent 991 low in the SPX may only be Minute [i] of C. Or it could simply be a "thrust" move and be quite over as far as I know.

So overall, we need more evidence on the wave structure. But technicals are pointing toward a pullback at the least.

So yes, this is another chart I am throwing at you. I am just trying to spark ideas for the overall count. 144 trading Fibonacci days is on 25 Sep I believe. That's not that far away.

Incidentally I did find a quirky topping that resembles the advance from 869 SPX low. A big bullish thrust up followed by an upward-slanted "W" pattern at the top. From what year? The top of the 1938 rally coming off the big drop down. So there does seem to be a precedent for a quirky upward-slanting "W" pattern at the top of a major rally. Its also ironic as many have been using the 1937-38 patterns for fractal comparison sake as I have done so in the past myself.

Weird huh?

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