Custom Search

Tuesday, December 15, 2009

Elliott Wave Update ~ 15 December

Several potential patterns playing out. Ascending triangle is what everyone sees I would think.
But it could be a sneaky ending diagonal which catches a lot of people off guard when it reverses hard down after a quick peak.
Internal count.
The Wilshire actually makes a pretty decent running-type contracting triangle.
Ok its starting to get a bit exciting again. As the waves keep tracing, the picture gets a bit clearer each day. We have several wave options and each index has a slight variation but all can be shoehorned into either an ascending triangle pattern (NASDSAQ) or a contracting triangle pattern (Wilshire and SPX).

There is also one other pattern which I have posted and that is the NASDAQ is an ending diagonal C wave. But you can also easily imagine that the NASDAQ is in an ascending formation with the "[e]" wave playing out now.

So whats the difference between the 2 patterns, ED or triangle? Well an ascending (or contracting) triangle gives the market the freedom to a wide range of upper targets. The traditional TA target would be add the width of the triangle to the breakout spot. An ending diagonal suggests limited upside of course.

The ending diagonal pattern as I have the NASDAQ labeled has limited upside. It can have "overthrow" usually but the wave [v] must be shorter than the wave [iii] by guideline.

But the whole thing reminds me of the long-winded triangle at the 956 top back in June. The final move up out of the triangle produced a stunted wave up to 956 and then the market pretty much fell back hard. A move below 1085 of course is very bearish and negates a triangle.

blog comments powered by Disqus