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Thursday, December 30, 2010

Elliott Wave Update ~ 30 December [Update 9PM]

[Update 9PM: 
TOP ALTERNATE COUNT (which depends on 1246.73 not being breached)
This count is my top alternate.  It has some merit because as I have mentioned the wave one's seem to be the big impulse wave during this P[2] rally since March 2009.  Look it up. Every first wave off a low has been a nice impulse and the third waves have actually been the complex ones. Perhaps this trait reveals the corrective nature of this P[2].  In a true bull market, wave threes would be the strongest. Here we have wave one's doing most of the heavy lifting.  Role-reversal sort of.  Then the wave fives have been a blowoff up move out of some sort of ascending triangle or consolidation pattern. 

Therefore according to this, we are entering some complex wave territory for the top of wave [iii] of 5 and then [iv] of 5.  But no matter, price level is the key here to this count. Wave (i) at 1246.73 cannot be breached or this count is null and void as I have it charted.  1291 would be where 5 = 1.  That would be the target for this count.

This count would allow a blowoff GOLD wave 5 of (5) of [5] move toward $1500.  It would also stretch wave (C) of P[2] to a more reasonable Fibonacci expansion level versus wave (A).  The dollar may retest 2010 lows. Oil might hit $100 and, well, blowoff tops in just about everything might occur. Bonds would likely continue to rise in yields though.

And of course it would break every last bear standing (if there are any left). And then when the market is at such a ridiculous level, and corporate margins have been squeezed by the CRB and the consumer is pissed at  $3.40 gas again, well... there ya go.  The Federal Reserve has never been more leveraged. Indeed the entire world would be super-leveraged.  Which would invite, of course, a super-reversal. 

Ponzi schemes always end badly. This will be no different.
Again, 1246.73 is the key to this count:
And why consider this count? Because my NYAD is still making new highs and it may be pointing the way. Perhaps its working on [iii] of 5.
[Update 8PM: US long bond.  Still maintaining this count for now. ]
Its getting harder to find possible upside counts using the base counts I have been using for the last many weeks. However the Wilshire has no 5 wave structure down from its peak.

I don't have a good upside count at the moment. Up until now its been easy to see more upside squiggles. We'll have to let things shake out for now.
Ending diagonal in the DJIA? If it is, an immanent price collapse should be coming would be the confirmation.
SPX daily. Still overbought.  Multi-year resistance at 1260-1270.
Wilshire hourly.
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