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Tuesday, January 24, 2012

Elliott Wave Update ~ 24 January 2012 [Update 8:15PM]

Update 8:15 PM: Double long term divergence of Price-Volume-Trend of the DJIA.

Update 6:22PM: For those who think the DJIA can "never" fall below "such and such", I present two charts that should make you realize that indeed declines can and do happen.

Japan's long term count and it doesn't appear to be over just yet.
And a closer inspection of the last few years:

Its got that (W) - (X) - (Y) look about it with the ol' tricky triangle (descending in this case) in the final wave (Y) position.

Update 5:05PM: Apple is due at least another wave up. Pretty gosh darn exuberant in A/H's.

Last week, the NY Times came out with a damaging article against Apple. Apple is clearly at the "top of its game". The huge gaudy profits reaped on the backs of near slave labor has finally gotten some major media attention.  And now this quarters numbers are downright obscene.

When your at the top, you have nowhere to go but down.  And Apple has no control over their products anymore.

Here is one such scenario for those who forget that we live in a real world:
If China were to say, invade Taiwan, and things got dicey with the U.S., and embargoes started to occur, what do you think would happen to Apple's stock price?

Or how about this:
Steve Jobs was the true engine of Apple. Apple's product line stales.  The moat is not that wide in the "gadgets" category.  Social mood declines and Apple's pricey gadgets suffer sales.

Either way, this chart is a very mature chart. Stocks don't go up forever folks.  And on the technical side, OBV is a warning.  After all, who doesn't own Apple already?

Exuberance is how a top should be and clearly everyone is exuberant on Apple tonight.

Today's gap down was the second serious test of the resistance - now-turning into support - zone of approx 1295-1307.   Prices responded with a steady rally.

Therefore the alternate chart posted in yesterday's update appears to be moving front and center.  Bears need a 5 wave pattern down for a confirmation of a trend change.  From yesterday's high to today's low counts best as a corrective zigzag, not an impulse.
Wilshire hourly:

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