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Friday, December 4, 2009

Elliott Wave Update ~ 4 December

There really were no divergences in the early highs today. The Dow, Nasdaq, SPX, Wilshire, E-minis, Transports, and even qqqq's all made new highs today. The RUT even made a new high versus its recent high of 17 November (but not taking out its summer high of course that's still up there a bit).

So in that respect all the indexes mentioned could have made their respective "C" wave highs.

The intraday waves are a mixed bag. You might be able to say the SPX formed a 5 wave down but none of the other indexes confirmed. There was divergence with about every other index at the second low today. That may have been because the banks sucked wind today and XLF has yet to challenge its November 11th rally pivot high.

Also the channels up remain largely intact on the small, medium and larger scale. However a third failed breakout of 1113 occurred yet the market finished easily above 1000 yet again. So all in all its a mixed bag. Technically this market seems to be sucking wind (such as RSI strength on each push up). However they could be "correcting" as the market goes sideways while holding upper support.

As a bonus the SPX nearly closed the big gap up it created last Friday. Its not longer an extreme bear target.

So we have the overall count and the market hung tough and finished well into the green. And JNK was easily green all day along with the Real Estate Index, IYR.

My chart of the NASDAQ shows an expanding triangle. This expanding triangle only works on a few indexes but the SPX it overlaps wave [i] or (i).

So the call for Monday? Usually Mondays follow Friday's action and I would hope to see more divergences on any new highs unlike we had today. The only divergences were on the second lows today. I still think there is room for further rallying. Perhaps we see some divergences. Perhaps the SPX is unable to make a new high yet the NASDAQ easily does.

They are back to pushing on whatever works again at this stage.

The price action is still generally more bearish than bullish in my opinion. I guess its all part of a topping process. The dollar may diverge and rally with the indexes for a while. Of course it'll be spun as "good" news.

We do still have some serious non-confirmations between European markets and ours. The FTSE 100 has yet to make a new high. Perhaps it does Monday.

Its all feels like its getting close, but I can easily see some more "pushes" again. The bears had an opportunity to close the deal but they couldn't get it done.

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