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Wednesday, April 7, 2010

Elliott Wave Update ~ 7 April [Update 8:16PM]

[Update 8:16PM: Apple just keeps pushing upwards but it may be a finished pattern.  Possible count below. The RSI divergence between the third and fifth wave is a telltale sign this may be a fifth wave.  However Apple reports on the 20th of April and keeping its price elevated until then is a possibility.  However we have to count them as we see em.

The main thing is its still in its tight channel up.
On a 5 minute chart you can see the 4 days in a row where it gapped up. I assume this is a thrid wave although its not terribly well-structured, almost as if it was forced (by hype). Even the wave 5 has its own channel.
1 minute chart shows what could be an impulse down.

Tomorrow we likely find out what the market has in mind for the near term..  So far the move off the highs on each index best counts as a corrective zigzag down and only sports three waves. This implies today's low was Minute [ii] of C of (Z). That is still the primary count (until it proves it isn't).

The spirited rally at the end of day does not look like a wave four.  In fact it nearly overlaps the first wave's low which is a rule breaker.

You can see here on the Wlishire where the end of day rally has almost breached the price territory of a supposed wave one down marked by the horizontal line.  On the RUT, COMP, QQQQ's and DJIA this wave one area price has already been breached by end of day.  That signals that the market is not yet ready to make a big 5 wave move down.

However, there is still 1 point of wiggle room for the Wilshire (and SPX) to form 5 waves down if tomorrow opens red, stays red and struggles sideways a bit and eventually breaks down to a fifth wave under today's low.  So  there is a slim possibility that we cannot yet rule completely out.
But it doesn't mean the market is not in the mood for further correction.  Certainly a complex series of corrective B waves may be in the works if we count the SPX 1191 as the Minor "A" wave high which is the alternate count.

But for now, the move down off highs counts nice as a Minute [ii] of C.  A perfect wave [ii] would be a big fat zigzag just like we had here.  So that implies that a surprise move higher in a Minute [iii] is just around the corner. As I said earlier, we'll be able to spot any wave [iii] in the works. Perhaps the end of day rally was the beginning of a Minute [iii].   Its still a valid primary count until it proves that it is not which it hasn't just yet. But I must say, projecting a wave [iii] of C higher at this stage of the rally feels....wrong and...odd because of how much the market has already been pushed. So I don't have a lot of confidence in this count.

[Also the "10 point rule" comes into play here: When your looking for 10 more SPX points, expect the market to fall short. Looking for 1200? 1190 may be the ticket. DOW 11000? 10990 is the best it can do maybe for now. We'll see!]

The SPX pierced the ascending triangle top horizontal line at 1181 and closed that small open gap from a few days ago.  Then the hard rebound and it closed above 1181.  Its almost as if the market was just taking care of that small unfinished open gap business and now its ready to move higher.

We shall see soon enough. Thursdays have been the red days. Will the market surprise to the upside? If it will, then the dollar will likely fall hard for that to happen and that is certainly a possibility due to the dollar wave pattern may be ready for a C wave down.
Again, the market has left us a pretty decent traceable pattern with good price "markers" and decent "decision point" probabilities to act upon depending on what further develops.  Again the [e] of B price cannot be breached for the primary count to remain in play as I have labeled here.

And this deep hammer on the hourly suggests a temp bottom at the least
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