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Wednesday, December 23, 2009

Elliott Wave Update ~ 23 December

I've shown a lot of NASDAQ and Wilshire lately. I have them both thrusting out of an ascending triangle formation. We await til they hit their targets and that should be it. Thats the theory anyways. But what about the DOW and SPX?

The SPX doesn't work as well in a triangle formation as the Wilshire or NASDAQ.  Hence, it hasn't "thrust" upwards as has those 2 indexes.   It has somewhat stalled.   Assuming I have the B in the correct location, then we can count 5 Minute waves from there.  Wave [i] did its job.  Wave [ii] was a deep retrace. Wave [iii] is somewhat muted (so far). Now there appears to be trouble with the 1121 area. If this was a robust wave [iii], it would have blown through already. But  there is light holiday volume and it takes heavier volume to blow through resistance on a main index like the SPX or DOW.

The SPX may be forming a small Minute [iv] triangle. Its not very wide, so the upper target would not be very high from here.

There is not much interest in the DJIA either.  Its still a rounded top. And now its starting to show RSI weakness.  You can say its forming a complex Head and Shoulders formation except its a pair of double shoulders at the least.

Sneaky formation.

The DJIA is also very close to its rising trendline. One bad bear day will send it over the edge.  It seems to think this line is important.

All in all, the indexes are all showing great diversit y between them. That is not a bullish scenario. A bull market advances together. There is a big correction looming at the least. I say it'll be P3, but forget about that for now.  The Wilshire, NASDAQ, SPX and DJIA  are all doing their own things and that is bearish.

Once everyone is done doing their "January Effect", then we'll see.

The transports may also be finalizing a Minute [iv] triangle. That coincides with what the SPX may be doing.

It still actually can be called an ending diagonal Minute [v] if the price lands at the right spot to the upside and establishes a squeaker high. But that has become the alternate count for now.  For now a potential Minute [iv] triangle counts best as the primary.

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