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Tuesday, March 9, 2010

Elliott Wave Update ~ 9 March [Update 6:50 PM]

[Update 6:50PM: This weekly on the Wilshire is interesting. We have a case of clear negative divergence on the RSI as we stand right now.  Psychologically, something has happened since the January top. Reference to the market, after all these months is now freely called the "New Bull".  No one had the nerve much of calling for a new bull when the market was just starting to rally, nor even near the January top. But now that it has arguably overextended its welcome is when we change mentally about what we think is happening in the market. We have collectively let our guard down, just a bit. At the least, its hard to see a price drop to, say, 900 SPX.  It "seems" preposterous at this stage.

Yet everyone hedges their bets because underneath it all they know they are playing with ponzi fire.  $10,20,30,50,100 Trillion....does it matter anymore that we keep the illusion and pretend that its all normal?'

The scary thing, is that if the final 8 months is one huge ending diagonal, prices will rapidly collapse back toward the July lows.]
[Update 5PM: As pointed out in comments, the transports did not make a new intra day high but they did make a new closing high.  Stockcharts screws it up a lot and I don't know why. JNK is also screwed up that way. However closing high is still very significant in may DOW theorist's eyes and sows more confusion for DOW theorists if the Industrials cannot make a new closing high. But I need to find the correct numbers...]

[Update 4:51PM: In many ways, somehow I think when Apple is done with its cycle run up that has lasted many years, then this market is "done".   There is good solid wave evidence on these 2 charts that is occurring before our eyes.  But, like all stocks with momentum nowadays, we need solid technical evidence of a turn down and a loss of major key support.

Sometimes marking such a significant multi-year run up high can be marked in some kind of magazine cover or some other widely-recognized or significant event. Something that says Apple is "on top of the world - and its looking nothing but rosy!"  So keep your eyes peeled out.
Apple's weekly shows the wave pattern.
A breakdown of the breakout move. Again, I am just throwing some markers on the move just in case.  It may need much more development.  Triangles can produce a thrust though so you never know. Due diligence of course.

We certainly have divergences between indexes and even markets still. Wilshire new high today.  SPX and DJIA not. The big story is that the transports made a new intraday and closing high which has now put the onus on the Industrials to follow suit. This is very bearish in DOW theory unless the Industrials can make a new recovery high soon. The DJIA sports a potential shooting star candle today also.

Sentiment is certainly creeping back toward Jan highs in many ways.  I'm looking for a red day tomorrow because the Wilshire squiggles seems to support it and technically this market is overbought even on the daily charts and many subindex's and stocks on their weeklies..

Again the Wilshire just keeps extending but the small expanding triangle explains the hard bounce this morning (e wave that faked out to the downside).  This time we may have seen a short term top. These things like to run 10 days long it seems so who knows. So far its been 9.  Channel break would be nice.
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