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Thursday, June 9, 2011

Elliott Wave Update ~ 9 June 2011

I'll present 4 counts in order of my personal preference and detail a few reasons in support (or not) of each.

The top two counts are getting ready to be diametrically opposed at some point in the very near future. In other words, one count (if correct) will win big and the other will lose big. I don't like this approach to counting but does anyone have a crystal ball I can borrow? The key is to wait for signs that one or the other will prevail. At the moment I can give reasons for each to prevail and each to fail.

1 ) Minor 4 triangle:
The receding volume and volatility supports this count.  The wave structure supports this count. However, it has serious technical hurdles it would need to mend including two 90% down volume ratio days.  And it cannot afford to lose support!

2)  Bearish Minute wave [iii] down:
This count supposes a leading diagonal Minute [i] from 1370 to 1311. Today's bounce would be part of a subwave (ii) of [iii] and meant to relieve oversold conditions.  We can normally expect the subwave two of three to overlap the price low of the wave one of next higher degree which is 1311.  So one might possibly expect a bounce to poke above 1311 based on that alone. However the subwave two of three cannot be larger in general than the first wave one of larger degree so that in itself presents a problem if it was to do that.

Whats supports this count? The fact that we have not had a "panic" moment in a "third of a third" wave down. This supposes the market is setting up for one.
The last 2 counts are much less favored but people want to see these variations so I present these:

3.) Minor wave four 3-3-5 Running Flat:
These patterns are supposed to be rare.  But I present it nonetheless.

4.) Bearish Minute [i] down. 
A variation on count three, this supposes we are working on a "short" Minute [i] wave down with a short wave (iii) with no true panic spot. For these reasons and others I don't support this outlook.
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