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Tuesday, June 1, 2010

Elliott Wave Update ~ 1 June [Update 9:10PM]

[Update 9:10PM: Lets look at this 60 Minute SPX chart again.  RSI has relatively obeyed resistance.  Also the waves seem to be slowly accelerating to the downside as you can see by the trendlines painted from the top.

Now, this thing is again, drawn as the "ideal" wave.  So the next wave down would be pink (i) of [iii] of 3.  Pink Minuette (i) should again, in theory, advance prices lower than 1040.  Then probably a brief rebound wave (ii) and then the bottom falls out in a truly "third of a third". It should be a big one down. It would also be where a "blue box" area of virgin wave space that gets left behind.

So this is what the primary count is painting. It leaves no easy entry for a large short position as a lot of folks cannot believe this thing will literally fall off a cliff so the positions are light.  It even looks like a falling wedge!  This is one reason Bob Prechter recommends the things he does because he knows how hard it is to "get bearish" as a reaction to the market rather than a preparation for the bear waves.

This chart is the primary count and so far, it keeps following it.  Until it breaks out of the ever-increasing angle of attack that the market may be in, well...the market has had more than a few bullish reactionary days since the drop off from the 1219 top. Yet each one is getting squashed back down and there has been a lack of follow-through.

The dashed red lower trendline is a potential pointer to Minute [iii].

I'll keep painting them as they unfold until they prove something different. They haven't just yet...
The Primary count is that [iii] of 3 of (1) of Primary [3] will be soon upon the markets if not already so there is a heavy bearish drag on the entire market when looking at things via that bearish count.  The market tried to make a break upwards today and failed and then tried to make a decent triangle and generally failed that too.

The gap up was breached at the end of day.  If this is (i) of [iii] of 3 down, then pink Minuette (i) should probably finish lower than 1040 so that it advances prices under the [i] low.
Perhaps we can finagle a bearish count into the mess. Leading diagonal, possible truncated top...just not enough info at the moment.
At the neckline again.
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