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Friday, January 6, 2012

Elliott Wave Update ~ 6 January 2012 [Update 5:05PM]

Update 5:05PM: SPY weekly.  Gapped up DOJI.  Volume is steadily decreasing on Minor 2.  Divergences. These are bearish interpretations.
Yesterday there were several options presented with the squiggle counts.  One of them was supposing Minor 2 was over and an expanding Leading Diagonal Triangle had traced out with a deep retrace back up. This count does well on the Wilshire5000, SPX and DJIA which greatly strengthens the case.

There wasn't a whole lot of hope for this small leading diagonal count being correct because there was a narrow window for prices to operate in today. In other words, yesterday's high had to hold. But amazingly it did through today's trading.

Its possible wave [2] traced a complex correction and the market is rolling over:
And this would be the micro-squiggle count. The leading diagonal has a very nice internal structure and "look". Heck, lets call it our primary count for this weekend. 

The wave [2] structure sports one of my favorite wave patterns to count: The ol' W-X-Y formation with a triangle in the Y wave position. This is a complex correction, but a valid one.
On the flipside, ideally wave [y] of double zigzag Minor 2 would make a price high above 1292 SPX as a strong guideline. So unfortunately, the other count is in an opposite direction.  The "break upwards", if it comes, need only be higher than last Tuesday's 1284 SPX high.  But the count allows room for it to run all the way toward 1300 SPX should there be a buying panic.

Wilshire used for form:
So again, we'll wait and see what the futures bring us Sunday/Monday.  In either case, the "count" is that Minor 2 is over, or nearly over.

Market internals again were weak today.
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