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Friday, January 15, 2010

Elliott Wave Update ~ 15 January [Update 8:30PM EST]

[Update: 8:30 PM: More BIDU charts. I approach Bidu from the standpoint of a market that is ready for some downside. If thats the case, Bidu should be no exception here.  The weekly BB spike and volume spike is a marker. I have a hard time swallowing that the $40 gap that big near the end of a 10 month rally is yet another breakaway gap and now BIDU is at a P/E of somewhere north of 105.  We'll see this week.

A punch of its upper BB may be all Bidu wanted to do. Recent patterns suggests a down week and a backtest of at least support should be in order.]

And the reason I say that is because this could be the final wave.  Maybe it stays elevated until earnings date but thats not until mid February. In any case, I will be keeping an eye out on unusual Put activity. Maybe another "rumor" will close that gap in a swift hurry. Today on the daily BIDU traded completely outside its daily BB.

[Update: 7:40 PM: For all the feelings that "this was it" because of the nature of the swift down move this morning, the indexes all held key upper support areas including the RUT. Its hard to get excited when the DOW wasn't even down 1%.

So if the market does have more up waves, then this makes for a good count on the RUT. This doesn't jive with the DJIA ending diagonal, but then again, it seems the only index that seemed to have had an ED was the DJIA so maybe its not, who knows. Everything else was very bullish impulses except towards the top where the waves overlapped.

Anyways, keep in mind if bears are to get skewered once again. Another thing is the markets are going to be closed Monday but overseas may drop badly Monday. The last time this happened was Thanksgiving and our wonderful markets managed to miss most of the downside on the "Dubai thing".  How convenient. Yes the futures may get hammered, but they can recover.

And how convenient that the markets are closed Monday after the bears finally did something other than stand there.  It doesn't smell right....we'll see.]

[Update 5:50 PM: Here is Bidu. Once the HFT machines get done with it.]

The Dow seems easiest to count so I'll stick with it for now.  Probably 5 waves down, and now a wave (ii) retrace.  Hasn't yet even reached a 38% retrace so I expect further upside although it doesn't have to be. This would also form a H and S formation. The left shoulder is not in view on this chart.  The wave (iii) would smash it down through the rising trendline for good.

Also notice that where I have the wave b would form an inverse head and shoulders and the target would be the wave (ii) target.

The alternate is that this was a wave [iv] low or something to that effect and now the market is going to skewer us bears yet again.  I'll have more charts later.

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