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Friday, February 25, 2011

Elliott Wave Update ~ 25 February [Update 6:16PM]

[Update 6:16PM: Today's internals were pretty good and barring a bear reversal miracle, it could be that BTFD will work like a charm yet again.  Additionally we have a huge SPX gap down that stands out like a sore thumb. So needless to say, I need a valid count that can take all this into consideration.  I present the megaphone ending diagonal.

This pattern prevailed at the April 2010 high

It works well as I haven't changed the count that much, the Minute [iii] and [iv] pretty much stays the same. I'll be watching for this pattern.

[Side note EW theory: It used to seem that converging wedges (ending diagonal triangles) marked ending waves. But due to HFT and the fact that converging wedges are widely recognized, perhaps the megaphone pattern is less visible and seemingly more bullish. Thus in this highly-watched and highly computer-controlled market, the expanding ending diagonal is now more common ending pattern than the wedge pattern.]
[Update 4:40PM: NYAD picture. The market has painted the uptrend line since the 2009 low. It seems to think its important.
Market internals were pretty strong today.  Needless to say, oversold readings are no more in the short term oscillators.

I'll count with the idea in mind that P[3] has started.  The bull count? Not P[3].

Wave two challenging the blue box "breakaway" area. Of course if it can re-take this area and hold as support, we likely challenge the old highs.
Another variation says the same thing basically.

Important point is that if this is a wave (ii) up, then it needs to reverse hard in a wave (iii) down early next week.

The Wilshire ended on its high breaking up out of a triangle.
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