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Thursday, November 12, 2009

Elliott Wave Update ~ 12 November

I expected weakness today and it didn't disappoint. Technically, its weak of course and I can easily see weakness happening overnight futures. How tomorrow plays out will of course be very telling.

There is no reason to abandon this as a Minute [iv] pullback just yet although its getting close if there is severe weakness tomorrow.

I objectively charted the squiggles and I came up with an expanding triangle. This suggests a (b) wave which means this is not to be a 5 wave larger structure down (and building upon more, etc.)

However....there are very nice 5 wave sub structures on the downside and since the market likes to disguise its hand as best as it can, there is a possibility that there are nested series of 1's and 2's and that tomorrow could easily be a "third of a third" coming. You'll know it when you see it.

So I am open and ready for anything. I'm short because I still believe there is a great deal of risk being long even if there is another lurch higher and it grinds on a bit. I just don't trust the MM's at this stage. I'm a bit of a permabear anyways.

We all know the score on all the bearish technicals that many bloggers and wavers have been pointing out for, well, weeks. Many secondary indexes are non-confirming the DOW and SPX high to include transports, financials and the Russell 2000 and NASDAQ. The big bear trendlines have been perfectly hit by the SPX, Wilshire5000 and the DOW has reached 50% retrace fib. We know gold is in some kind of wave 5 move and the dollar is..the dollar as usual.

Its all been obvious and it all paints a grim picture. But so far, prices have not cooperated, at least not yet.

The obvious counts (and maybe not obvious) are:

1. This is an A wave in a final zigzag in a triple Intermediate zigzag that will drag the rally on for perhaps the rest of the year and it could be a craggly set of moves (just imagine perhaps a big sideways scraggly B wave). Justification: No fund managers are selling at this stage. Damn the torpedoes, they want to beat the market this year and get a record bonus. Social mood has yet to crack.

2. The SPX "topped" officially or will shortly after the completion of this final move up in the next fews trading days.

The other points that are obvious at least to me is that the entire P2 rally has an "ABC" look to it so far. It could be labeled a double zigzag of course and may even count better that way.

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