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Tuesday, April 6, 2010

Elliott Wave Update ~ 6 April [Update 8:15PM]

[Update 8:15PM: The other night I showed a triangle on BIDU in what I have as wave [iv] of 5 of (5).http://4.bp.blogspot.com/_TwUS3GyHKsQ/S7VDnlgmFtI/AAAAAAAAEpg/QCV4kEhhgtQ/s1600/bidu.png  Today it followed through to the upside in a violent thrust move.  The triangle target is a new squeaker high above wave 3 price.

[Update 5PM: Looking again at the RUT, I gave a target last night of approx 704-705 for the "thrust" out of the triangle. It hit above 702 today so things look good. This could very well mark a decent significant top. However, the RUT has settled into the breakdown gap of 2008 which spans from 699 - 705 almost leaving it unfilled.   Also the 705 target may be shortchanging the RUT perhaps.

The RUT is into a mix of big weekly price candles from 2008 and finding precise resistance points are tricky.  However, using monthly candles there seems to be a definite marker at the 716 level.
The count looks good. The structure fits.  Now we just have to see if it has topped for now or not. It could be just (i) of [v] which still means a (ii) to come perhaps.
The market has made enough of a wave structure to "mark" key areas to support primary and alternate counts. Here is another quick summarization of where the markets may be:

1. The primary count still has a breakout from a Minor B sized ascending triangle. The triangle target is around 1210.  Another target is C = .618 x A at approx 1220.  There are problems with this primary count. Mainly the market may be tired and it exhibits extreme bullishness in many indicators.  To put a wave count with a target that high from here without much correction will mean that the market must keep aggressively rolling up over potential  reversal bear setups and bullish sentiment (and any technicals).  In addition, 1200 will present serious resistance and that resistance is likely being "felt" already. So to be blunt, this count is pushing things. However, thats all this market has done now for many weeks on end. So until the count has been invalidated, we respect the potential. So far it has guided us well enough over the last few weeks, so no reason yet to assume it is wrong.

A breach of [e] at 1170 will invalidate this count and take count #2 to the forefront:

2.  An alternate count is that today's peak was the true A wave peak break out of a smaller contracting triangle and we are now going to get a B wave pullback, possibly 38% or more back toward the 1086 spot.  I showed this count yesterday and today's up move filled the "wave (v)" target nicely:  http://4.bp.blogspot.com/_TwUS3GyHKsQ/S7pHd6sYu-I/AAAAAAAAEq4/MFk1RjxpVXk/s1600/spx10.png
Again, a breach of [e] will help confirm this to be the case.

3. P2 top itself.  I mention this because most likely a super-majority of bulls and bears ironically do not think this is possible at this stage due to technicals, sentiment, FED, wave structure or whatever.  A close under 1150 will start to bring this count into the forefront.

The SPX 10 minute chart is drawn with the primary Minor B count shown.  You can see perhaps a Minute [ii] of C is playing out and today was a (b) wave up of an expanded flat for Minute [ii]. Again, the [e] is absolute key. However we have higher "markers" and the main one is the top blue horizontal line (1180-1181) of the proposed ascending triangle.   If the market means to go over 1200 from here, this top line should hold as support in general. Also we have the ascending blue channel line stretching all the way back to 1044 to act as support.  Obviously we are watching this closely too.
So it really comes down to watching for clues whether the primary count (1) will prevail or the alternate (2).
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