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Monday, March 29, 2010

Elliott Wave Update ~ 29 March [Update 7:10PM]

[Update 7:10PM:  The DJIA seems to be in its own count.  This squiggle count has a lot going for it. Impulsing in 5 wave patterns.  Could be on the final waves to a wave [v] high. Obviously 11000 is the target. I like how the 38% and 62% Fibs line up under 2 key pivot points.]

The last 2 weeks of waves have reminded me just a tiny bit of the sideways November - December 2009 B wave (what we called it at the time) correction.  The market gapped up numerous times only to wind up selling off or gapping down numerous times. Yet a trading range held until it could muster up a breakout.  So today, after 3 days of gapping up, this one did not close before end of day.

(To be fair the waves also reminds me of the sub-700 SPX in that it just kept going down in a "pushing" manner and sentiment reached bear low. Here prices may be "pushing" up and sentiment is working toward a bear rally high - See SPX 1 minute chart at the bottom)

One interpretation is that some kind of Minor B wave is forming on the SPX and Wilshire and it has yet to reveal its hand.  The DOW however, seems to be in a differing pattern and perhaps wants that 11,000 "hit" first which is dragging everything with it upwards.

The Wilshire 10 minute chart shows the general thinking here. There could be a complex B wave forming. Or perhaps an expanded flat or some kind of triangle, either ascending or contracting.  We just don't have enough info yet.   The pattern is similar on the SPX. 1150 is a key level overall for the market at this stage. It has spent enough time elevated above that any close below 1150 may be taken as a "false breakout" and looked at as bearish.  
Certain bullishness indicators are certainly concerning for the bulls. Yet the market's price has held steady and thats all that matters.

Overall  a Minor-sized "B" wave corrective implies a Minor sized C wave to come that will push the markets even higher. How high? Look for a Fibonacci relationship between C and A.

But first I am not sure if we are in a B. It has to have the "look" on the daily first which it has yet to do:
Here is the non-log version of the SPX:
Perhaps we just keep chugging upwards and the market may be forming yet another ending diagonal triangle. Too early to tell, but a significant new high by a few points hitting the upper trendline may be a clue. This has a potential again, as the market just keeps "pushing" in ABC-type moves.

So tomorrow is yet another key day in the life of this market as it is simply open-ended at this moment in time.

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