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Thursday, August 26, 2010

Elliott Wave Update ~ 26 August [Update 7:42PM]

[Update 7:42PM:

CPC is still tame considering P[1] and even pre-2007 top seen it go very high. Of course prices were much more bloated so it seemed a no-brainer then. Now its a bit more of a slog. Sooner or later though, if the market keeps falling, it'll be forced into submission.
BPSPX I made a target range for Minute [i]. Not sure how it'll work out but we'll go with it for now.
On gold we have some negative divergences peeking through after what could be a 5 wave move. Sentiment is fairly high on Gold.  And it is dealing with resistance. If its a Minor 2 expanded flat, we arguably have 5 waves for the [c] wave in place.
TLT is showing signs of perhaps cracking a bit (although the weekly looks strong).  Its overbought and Sentiment Trader did a big write up today on bonds and sentiment. Their conclusion was that it was very bullish (but not ridiculously extremely so) and that likely bonds will give back some of their gains sooner rather than later. I generally concur with that reasoning.

EWI will have a nice newsletter on bonds (and all debt) coming up soon from what I understand in their next Financial Forecast newsletter. If you haven't signed up for Club EWI (which is free), click my link to left. (Disclosure: If you then buy their newsletter after signing up for Club EWI via my link(s) I get a small commission when you buy any of their services.)

CMF looks weakish and accum seems flattish. Plus bear candle on volume.
Finally the dollar. Looks bullish.  We can guess on the waves for now but the trend seems up is all that matters.
Original Post:
Well the general count on things still seems to be working so we'll keep going with it.

The overall thing I keep in the forefront of my mind is that the market is likely trying to make it to a target area for Minute [i] of Minor 3. And using the general guideline that the first subwave one of a wave three wishes to try to advance prices, my suspicion is that therefore the target area is under 1010 SPX.

So we may have to adjust counts along the way as it has been a bumpy ride no doubt. But we should expect a bumpy ride. http://2.bp.blogspot.com/_TwUS3GyHKsQ/THWirvu01HI/AAAAAAAAHRs/bEQDiwrLN9k/s1600/spx60.png Sooner or later the market is likely to have another big downdraft day to help reach its target area, perhaps a wave (v).

Sentiment is starting to get fairly bearish in certain measures such as this week's release of the AAII survey but according to wave theory that bearishness will not result in a hard bounce until we have a firm 5 wave structure down (and very likely market oversold conditions)  in place forming Minute [i].  Then Minute [ii]'s job is to correct it all.

As long as the market prices stay inside this down channel, things are generally pointing downward.

And my blue box virgin wave space has held its ground and has not yet closed.
For an example, their could be an expanding triangle in the works. Naturally the last big e wave up will convince the bounce is here. But then it turns down. Then when the market hits bottom, sentiment again would be bearish - and it turns up. The market shakes all participants the most it can.

If we get some other pattern, then we'll have to adjust on the fly.
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