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Thursday, September 29, 2011

Elliott Wave Update ~ 29 September 2011 [Update 7PM]

[Update 7PM: Crapple will undoubtedly be the last stock standing.  Fairly confident its in its wave (5) of a primary [5] of a cycle wave high. Too many count options at the moment for wave (5).
But long term its a cycle high per EW count:
[Update 6:20PM: I had Netflix in a huge ending diagonal pattern which suggested exhaustion and subsequent price collapse was coming.
The aftermath and downside follow-through. Very impulsive to the downside.
That other fan fad fave CMG looks quite similar to Netflix in a huge ED pattern which could be exhaustion. Will it suffer the same fate? Still above support.
[Update 6:04 PM: A closer look at the triangle count. A price breach under 1130 from here violates this count.]
[Update 5:52PM: TLT squiggle count:
[Update 5:45PM: The reason we may see a sharp bounce higher is that both the e-minis futures and SPX cash index may have traced a leading diagonal down which implies a possible deep retrace up of 78.6%. This would take prices toward the upper wedgeline I was showing earlier
The market has formed a subtle downward wedgish shape from the 1230 SPX wave [iv] high.  Last day of the month/quarter tomorrow.

I wouldn't be surprised to see a challenge to the upper wedgeline tomorrow.  A break to the upside of that in the next few days could indicate a triangle option per the daily chart shown further below.
SPX daily. 50 DMA is at 1200. The 200 DMA is starting to slope down. That really hasn't occurred in a long time.

We also have a large converging pattern in development. This would be the triangle option for wave [iv] which, depending on how the next 2 days play out, could become the top contender for a pattern.
Monthly shows 5 straight losses unless tomorrow is simply an amazing up day.
We have a couple of viable counts to the downside - wedge at the least, wave (iii) of [v] at the most - therefore its best we to be on guard for the bullish near term options. The upper wedgeline is one thing to look for should we get yet another gap up open. Then the converging triangle barrier line as shown on the daily if a rally can be sustained.

Place your bets.

Could be a leading diagonal down for the last few days which implies a deep retrace up which may challenge the upper downsloping channel line.

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