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Friday, April 30, 2010

Elliott Wave Update ~ 30 April

Big daily reversal candle on the indexes. Stair-stepped its way down today and big volume dump at the end of day.  A prominent head and shoulder pattern is now in place on the indexes.

The wave (ii) count I showed from yesterday has certainly held up so far

The key I think is that it is nicely impulsing down in 5 wave patterns and correcting back up in three. The tone of the waves seems to be purifying to a more impulse state to the downside as occurred often in P1.
The market is wide open for the short term direction for Monday's open and early plays.  Could bounce up at the neckline, in a double shoulder pattern or could blast down through after a headfake up or gap down.  There is no clear-cut thing wave-wise at the moment that I can see. We'll see how the weekend goes.

The one bearish item is that perhaps the market is impulsing down in 1-2, 1-2 pattern as there was not much alternation between correction during the intraday.
The RUT broke under yesterday's low and broke its tight channel. Bearish.
Some negative divergence between Transports and the Industrials to top things off.
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