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Wednesday, April 14, 2010

Elliott Wave Update ~ 14 April [Update 7:50PM]

[Update 7:50PM: There are several ways to look at the squiggles. Here they are in a nutshell:

1. Ending Diagonal Triangle in play. Cannot move above 1212 and must collapse in price.

2. Middle of the "third of a third" in play. I show this generally on this earlier Wilshire here

3. A blowoff extended wave [v] peak on high volume. Volume picked up today, and I have a feeling it may again tomorrow.  A possible count has the market already in wave [v] but not in an ED move but a valid 5 wave structure. One would have to mark wave [i] where I have it though.  This would keep wave [iv] from retracing into wave [i] price territory.  The chart has its merits.
The move up today had good strength internally so the ending diagonal, although not yet technically violated on the SPX, looks pretty shaky at this stage.  So we must revert back to a primary count of Minute [iii] of C.  The gap up today created yet another potential "blue box" area that should not be retraced into until the entire structure we are tracking is over.  This would be the "third of a third" of C of (Z).  If this count is correct, then we are looking for the top of Minute [iii] soon.   Then we would need a sideways Minute [iv] and then [v].

The ending diagonal is the alternate count and we will know quickly if it is a valid count. Simply put, ED's produce a price collapse and since that needs to happen ASAP tomorrow, its not looking good at all due to good internals, etc.
Despite the primary count suggesting even still higher prices to come, a lot of interesting head-turning things are happening so allow me to show some stuff

First lets talk about the massive inverted H&S pattern that exists on the Wilshire, DJIA, and SPX (it doesn't on the NASDAQ). The target pretty much was reached today for the Wilshire. In addition, if the second (X) wave was a triangle, the triangle target may have been reached also.
On the SPX, the market has made it to the upper line on log scale. On non-log, a break above this line occurred today. Triangle target for the SPX both the larger intermediate (X) and smaller B wave was met today.  Also the apex of the second (X) wave (if thats what it is) is forming a point that is close to being met. Apex's can be major turning points.
SPX inverted H&S is around 1240. This would align with the 10 minute chart count I showed above.  Also the DJIA target (around 11350) is approx the same as the SPX. They would likely meet their inverted H&S targets at the same time.
The NASDAQ is going crazy. Gapped above its upper Bollinger Band today and traded higher. Thats kind of rare.
The RUT is 6 points shy of piercing its monthly upper Bollinger Band.
So all in all, a lot of WOW stuff going on but the market keeps steamrolling all bearish setups (the ED was a great potential setup today but the market turned higher and had other ideas)

The gap up today, is important on the SPX. For a valid wave structure, it really should not be closed and if it does get closed, that should be indicating exhaustion.
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