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Monday, December 20, 2010

Elliott Wave Update ~ 20 December [Update 6:07PM]

[Update 6:07PM: Do we have an ED pattern in the works on the e-minis? Very strange structure at the moment. It could just be a double ZZ up for wave (b) of Minute [iv] and its ready to correct down.
Is the NYAD ever going to make my wave 5 high? Its reaching an interesting point on the channel. Something needs to give on this chart soon.]
[Update 5:27 PM: I think the key is to be patient. Sentiment indicators are extreme. Coupled with a potential nearly completed Minor 5 wave pattern since the July low and weaker and weaker market internals starting to diverge badly, and we will see our big correction at the least soon enough.

The problem now is that its a little bit like watching a  boiling pot of water.  Keep watching and it never boils. And the entire investing community of traders and such are doing just that.

So there is a potential for a stealth triangle to develop. Below is an example from 2009 in which a weak triangle resulted in a nominal high and then quick correction down.
There is a potential in a low volume environment to do the same here. Correct at a high level in some kind of triangle pattern and then a nominal new high. 1256-1260 would still be a viable range.

Here is one such example of a triangle and then a break up to a nominal new high price which is all that is required. The whole pattern would be similar to that 2009 pattern I showed above.

Primary count is Minute [v] of Minor 5 is playing out.  A close alternate is that Minute [iv] is playing out as a triangle of some kind.

This chart details both options. The expanding shape of the last day and a half is noteworthy and could be a trait of a high.
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