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Monday, February 22, 2010

Elliott Wave Update ~ 22 February [Update 8:32PM EST]

[Update 8:32 PM: Minor tweak on the IYR chart. I propose an expanded flat for 2.  [c] wave has bounced 2.618 exactly times the length of [a]. Second chart has a zoom in view.]
And a closer look at what that expanded flat may count like. You can see that the upleg from the recent low probably counts better as a 5 wave move so it could be the [c] wave of that expanded flat.
[Update 7:41PM:  Sentiment strengthened today even though the market closed red.  Also the VIX closed lower which also is a bullish sentiment. Price action and time = relax, the-bull-is-on-again-type-thinking-no-need-to-worry.  Its a very good sign for bears as this complacency and lack of fear is whats needed to set the market up for another leg down of course.  

So we can say that today finally produced some relaxation in the bulls even though the market turned red.  Another up day will produce even more bullishness no doubt and complacency.  But another up day is certainly not required.  However as I showed on the WILSHIRE chart, one more day would fulfill a time ratio and there may be some more targets that need hitting like JNK.  Also if BPSPX hit above 72 would be nice as its a backtest target.   There exists a small unfinished business gap on the SPX at 1115.49- 1116.48. That was my target area when the SPX was rallying earlier a few weeks back.  Sometimes targets get hit in a roundabout way.  If it does get hit, I suspect it will be short-lived is my guess.

But again, its nice to see true bullish tendencies back in vogue and the proof is a down VIX and up sentiment reading even though a red market.  
[Update 6PM: I think stockcharts screw up the high price on JNK. I remember it going over $40.  It has done this before. Anyways, the target box is near. Very steep up trendline that has yet to break.

Expanding waves off the top is a place we would expect to find an expanding pattern.]
[Update 5:40 PM: The NASDAQ counts well as an impulse off the top. And then a corrective zigzag, albeit a long-drawn out one, back up to the afternoon high.]

[Update 5:17 PM: Keeps pushing to the upside in zigzag type moves.]

Time-wise, the Wilshire could use another day of trading before it reaches its ideal retrace in time for wave [ii] or 2.  Doesn't mean it has to. Sideways day today which is usually indicative of some degree of wave four action.  The next option is its rolling over.  Technically it seems like its rolling.  But will there be a blow off top coming?  Minute or Minor wave twos have been known to do that. I do expect overseas markets to have some more retrace in a few markets likely Japan and Australia. Not sure about Europe as the FTSE has done a fine retrace.
Financials reached their blue box retrace target zone, then had a bearish close.
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