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Thursday, October 27, 2011

Elliott Wave Update ~ 27 October 2011 [Update 9PM]

[Update 9PM: Minor 2's target range is starting to take shape. I have been mentioning 1305 SPX since the Zweig Breadth Thrust. That seems within reach if we have another wave to go.  Looking at the charts and seeing how Minor 2 is taking shape, a higher target is certainly possible.

Minor 2's target range is 1305 - 1327 SPX.  I like the 1327 SPX because that means a bear candle gap down will be revisited on the SPY and most likely close. It is also the target for an expanded flat count for Minor 2.

1256 is a key pivot level. Any breach of that price - since we have that marked as (i) of [c] - and we likely have a reversal.
[Update 6:13PM: The non-confirmation in the 30 year yield is still intact.  As someone mentioned in comments, the multi-decade bond bull run reached a Fibonacci 34 years in September.  Bonds topped in...September.
There is also a non-confirmation between 30 year yield and prices. New price highs, yet yield low was not.
[Update 5:49PM: AAII bear percentage has been slain. AND this data came out today and does not include today's likely further sentiment swing.
[Update 5:45PM: Breadth Thrust shows no negative divergence yet. (Doesn't have to, but again, its something to look for if it appears.)
[Update 5:38PM: 6 month yield count. Looks finished. Rates to rise. Defaults, more Fed gyrations to no effect  Its all going to explode folks. The mathematics assures it.
[Update 5:32PM: GDOW in the box.  Like the rest, we assume its missing a wave or so at the least.
[Update 5:28PM: The world according to Mr. Ben Bernanke.
[Update 5:07PM: Squiggles using the Wilshire5000 for more precise form. (again consider the SPX in the same count)
Primary count is that the high today may be the top of wave (iii) of [c] of Minor 2 up.  Wave (iii) has expanded 1.21 times wave (i) within [c] so it may run a bit more. However, we do have 5 solid sub waves for (iii) so we'll just have to see. For now we'll label the 1292.66 high (iii) and adjust accordingly as needed.

What a burning star overall. Up 218 points in less than a month of trading.  I warned the Zweig Breadth Thrust event was something I respected and it has produced some aggressive prices advances. But like a rocket that goes straight up, when it runs out of fuel, it comes down hard.

Internals were not as stunning as you may think. The NASDAQ was not a 90% up day.  Up issues on the NYSE, though quite robust, finished the day at 87%.

Today stunned a lot of people.  The market has now captured everyone's undivided attention after languishing in the trading range of 1100-1230 for some time. So sentiment readings, both long and short term, have been jarred one way or another on every market participant.

The market has run run into next resistance and can be seen on the e-minis:
SPX 5 minute chart:
SPX Daily. You can see it ran toward resistance today. Getting through that without at least a correction would not be unexpected.  Hence, I labeled today's high assuming it may be (iii) of [c].
SPX hourly chart:
I'll have more as I get a chance to look at some stuff.
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