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Thursday, May 5, 2011

Elliott Wave Update ~ 5 May 2011 [Update 7:42PM]

[Update 7:42PM: 6 month wave count. A while back I showed this http://1.bp.blogspot.com/-825NeV0WdEc/TaS-K7t49CI/AAAAAAAAJBc/cijNKOKjYaA/s1600/6+month.png

....which resulted in this:

[Update 7:33PM: IYR's proposed ED pattern.
[Update 7:31PM: Dow Theory non-confirmation watch. Funny how I really haven;t seen anyone mention this but me.  It seems everyone was too caught up in the "transports are leading" nonsense.  Rather this is the biggest Dow Theory non-confirmation super-bearish setup in the history of Dow Theory.
[Update 7:25PM: ED pattern in oil has resulted in exhaustion and price collapse as it should.
A closer look shows a classic wedge.
[Update 5:35PM: Look at the following 2 charts. On the first we have a larger ED pattern. On the second I propose a Minor 4 triangle. Both have the exact same moves and both would indicate a final move.  A wedge pattern would indicate exhaustion.  A short thrust out of a triangle would indicate exhaustion also.

ORIGINAL POST
There likely has been too much overlap in the indexes, except for the DJIA, to consider Minor 5 as a normal 5 wave impulse structure.

It does not fit well that a major top such as proposed P[2], ended on a multi-month 3-3 pattern (3 down then 3 up) which does not fit well within context of the larger wave structure. So we still must allow the market to sort itself out.  And we must allow that the market may eventually, within the next few months or sooner, attempt another high based on the fact that the count does not look complete.

We have several options:

WE WAITED ON THE FINAL MINOR WAVE 4  AT THE 2009 LOW...IT NEVER CAME
Ironically, we waited on a Minor wave 4 at the 2009 low. http://2.bp.blogspot.com/_TwUS3GyHKsQ/SbIAC1Wq40I/AAAAAAAAAAc/S42Bp24kzaw/s1600-h/daily+SPX.png

But in that instance, we could say that Minor 5 occurred out of a triangle and was a single "thrust" move. In this case at the proposed P[2] market high, we have no such previous setup in wave structure

WAITING ON WAVE COUNT CLARITY
Support resistance, gaps, technicals, trendlines, sentiment, and market internals.

In the end, something will work out.
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