Custom Search

Tuesday, December 7, 2010

Elliott Wave Update ~ 7 December [Update 10:13PM]

[Update 10:13PM: Current updated e-mini count. You can see the wave (iv) triangle and the price weakness that has followed. Is this actually all of Minor 5? It'll take time to determine that.  For now we'll call it wave [i] of 5 and go from there. That way even if we are overly bearish (which I admit I am at the moment) it won't surprise us.

You can see the big negative divergence in the MACD signal lines - and it seems to be starting to pan out and result in price weakness. Also note the high volume red bar today on the downside.
[Update 9:52PM: NYAD update. Today was a flat ratio today - practically 1:1 - and the indicator went sideways. Yet market prices on the Wilshire5000 (total market) and SPX and others were at their highest peak in years.

So there is some bearish negative divergence going on in the advance/decline of the NYSE. All the other rallies this indicator has generally led prices higher - this goes higher first, then the market prices follow. So far, this is unable to breach to a new high to fulfill its count, yet market prices have reached a new high. What to make of it? Well, overall its bearish and we are due some market price weakness - possibly very bearish weakness resulting in a 2% drop or more. How much selling occurs is up to the market.  Volume (down or up) will be important short term.

Overall, I'd prefer to see a new NYAD high eventually even if it takes a twisted path to get there. So maybe down again to the channel line before up. We'll see.  Its "feeling" toppy either way.
[Update 9:38PM: 30 year bond yield which is, in my opinion, leading the shorter duration by the nose in an upward march. My general thoughts is that (1) of [3] will be at a higher yield than [1]. Rising yield deflation (eventually) The guideline here is that the first subwave one of a wave three will try and advance prices - in this case a higher yield]
[Update 7PM: A cycle wave zigzag since the 2002 low for the NASDAQ 100?  I guess so. Mere points from taking out the 2007 high. And if it does, that is major divergence with the other indexes which is bearish in my book.

I suppose what I called a "truncated" 2009 low was actually a wave (2) and signaled all along that the 2007 highs would be challenged. I should have heeded my doubts about this a long time ago. Somtimes the simplest things cannot be overlooked. 3 waves down from 2007-2009 signals challenge to the 2007 highs

Incidentally the NASDAQ Composite overall had 5 waves down from 2007-2009, and therefore I think the NASDAQ Composite will not take out its 2007 high even if the NDX100 does.
Today was a bit of a surprise opening but the end of day weakness wasn't surprising.

The market always seems to take the path that causes the greatest doubt. Today was one such day.  Do we have enough for a complete wave 5? Well maybe. Is it a [b] wave of Minor 4? Well maybe. Is it merely wave [iii] of 5 with Minor 4 being abnormally short in time length? Well maybe.  Is today the true top of Minute [i] of 5? Well I just cannot have great confidence at the moment.

So today's thrust added a new dimension to the potential alternate wave counts.  And thats to be expected of the market.

Overall though it was a flat day with a big shooting star that begs confirmation. So we'll assume the market will get either wave [ii] of 5 weakness or wave [c] of 4 weakness, or wave [iv] of 5 weakness. I would not even rule out the top of P[2] itself.  So even though we have our multiple alternates, each potential calls for a pullback or consolidation. What form it takes and how deep and the character will go a long way to answering all the questions I just pondered above.

Taking an overall "look" on things, the market has advanced with vigor over the last few days. Enough for a complete wave 5? Well I cannot rule it out. Wilshire shows the shooting star candle poking through the top of the BB.
SPX daily shows an advancement toward the double pattern inverted H&S target of 1245-1250. Still a bit short
Some closer looks. Wilshire 60. Wave 5 has advanced in price at least 50% of wave 1.  Enough? Of course it is never easy.
Today opened up a whole lot of new alternate count potentials. Only time and more waves will reveal the ultimate form.
blog comments powered by Disqus