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Monday, October 31, 2011

Elliott Wave Update ~ 31 October 2011 [Update 8:35PM]

[Update 8:35PM: I am seriously considering changing my long-term count from P[3] down, to a double-three cycle pattern.  Nothing much has changed in terms of ultimate price and time targets. I still have DOW 1000 - ala 1970's support - as the ultimate bear market low. Nor do I disagree with Robert Prechter's thesis that 2016 will see the ultimate price low. He makes a rock-solid argument concerning time and price.

But form is another story.

Speaking of EWI, they have this as Intermediate (1) and (2) of P[3] down. This simply does not make sense in terms of price projections and form. If Intermediate (3) down of Primary [3] down is about to begin, its going to be one hellava long wave in consideration of how short in price (1) of [3] was since their target is 1000 DOW or below for the bear market low.

So again, if I change my labels to Intermediate (1) down, it'll be (1) down of Primary [A] of cycle zigzag wave y. (1) of P[3] simply does not make sense if your bear target is DOW 1000.  After all, the first subwave (1) of P[3] down should try to advance prices beyond P[1] (666SPX)!  Hence why I have been labeling my wave charts one degree lower than EWI.  But in fact I think we may be both wrong here.  I should be using Intermediate labels (1) and (2) and EWI should abandon the P[3] thesis as the way they have it labeled. Its going to look retarded after a while and they will be forced to change things.

After all, if (3) of P[3] down is beginning (according to EWI), then won't the biggest panic occur approximately where the same panic occurred in 2008? It doesn't make sense.  How can that be?  Again, I think they'll be forced to change things as they have labeled. Either they go down one degree in wave labels or they abandon the P[3] thesis and adopt something different.
This is based partly on the Consumer Sentiment chart shown below. Clearly we had a zigzag down. I propose sentiment will do yet another zigzag down to unheard of low levels.
I have Japan is a double zigzag from its peak, so the use of double patterns is not without precedent:
[Update 4:55PM: CMG. Has a wedge thing going and we got the new high today which was required minimum.
Primary count is Minor 3 down of Intermediate (1) of P[3] is in progress.

Last Friday, it was stated if the SPX breached 1256, or proposed wave (i) of [c] high price, we may be in a reversal.  It was breached on the SPX and Wilshire5000. So the primary count is that Minor 2's price high occurred last Thursday at 1292 SPX. We'll go with that and see if the market can "best" it.

By any measure, Minor 2 has retraced more than a healthy amount. In fact the retrace can be considered extreme in both time (short) and price for a wave 2.  So there really is no problem marking 1292 as Minor 2 in these extreme market times.
Which forces a squiggle recount of the rise from Minor 1 low at least on the SPX and Wilshire5000.  How about a double zigzag? In the end it doesn't matter much as it has a "three" look about it no matter how we count the squiggles.
The DJIA however still counts nice as a 5-3-5 zigzag.
The intra-day squiggles seems to be impulsing down. This leaves room for a bounce back up in a wave two if the market so chooses.
Again, Minor 2 has retraced a lot of wave 1. The DJIA had a nice back-test on its neckline.
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