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Monday, October 26, 2009

Elliott Wave Update ~ 26 October

EDIT: 7:30 PM: Of course if the dollar has bottomed, you can guesstimate that oil and gold may have already peaked too.

The dollar is the story today. It appears to have finished a 5th wave wedge of a 5th wave of a C wave down. Big green volume bar as you can see. There is more work to be done and a couple of more hurdles to clear to be sure as you can see some other prominent lines that have yet to be challenged. But its a good start.

The markets opened rather strong as we suspected over the weekend. But the triangle effort failed as the market drove down beneath 1070 on a subsequent reversal. Not surprising as the triangle looked too steep in its legs and kind of retarded at that point.

However there were bullish friskiness in certain stocks. AMZN keeps running and may hit that $130 mark at this rate. The NASDAQ only finished .59% lower.

The waves are overlapping indeed but the squiggles reveals strong 5 waves structures heading down if you look at them under a 1 minute chart. So the obvious question is the market forming a series of 1's and 2's waves down? If so, then we would expect even further downside before the week is out. Any big time rebounds back up in the indexes may depend on how much they can beat the dollar back into submission I suppose.

In any event the market seems a bit fractured which would happen at a major top. Eventually when the primary trend of "down" takes complete hold over all the indexes, a majority of stocks will also head down. Thats when you start to get 90%+ down days.

I plotted a potential Head & Shoulders on my SPX 30 minute chart. For those who will say its looks sucky as a H&S I will say those are the ones that usually work. I drew a lot of lines all over the place just to see what hits.
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