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Wednesday, March 14, 2012

Elliott Wave Update ~ 14 March 2012 [Update 6:25PM]

Update 6:25PM: The big, big picture of P[3].
Update 5:37PM: Remember how this blog's readers - and I - fretted about the apparent a-b-c "three" going into 2011's price peak?  How it didn't really count well for a three-wave move forming a peak and all that?  Well, I suppose it was because it was not the top - duh!

It seems the "Primary wave [3]" down count that Robert Prechter conjured up is officially a "dead" count even by all bears who are regular blog readers.   Well not so fast.

This recent fractal of 2011 kind of proves that the P[3] down count is alive and well. This "expanded flat" is even counted this way by Elliott bulls.

Incidentally I'd say that Prechter's sentiment rating is hovering somewhere around 3% at the moment.  If Prechter was a stock index, he'd be considered extremely oversold with maximum negative sentiment.  I'll take that side of the trade any day.
Primary count has the market finishing up a 5 wave move from the 28th of November low of 1158 SPX.

Regardless of whatever failings we have projected before, Elliott Wave theory works best when wave forms are approaching the completion of a pattern. This holds true whether you are looking at a 5 minute chart spread over a few days or a 5 wave pattern spread over 4 months.

Fibonacci numbers also work well within 5 wave structures.

Whatever you think about the count, the Fibonacci works out well on differing time scales.
Here is a closer inspection of the proposed wave [v] of Minor C of (Y) up. 

Be on the lookout for a w-x-y formation for wave (iv) with a triangle in the final position. Its a market favorite in a spot such as this. Key price level is shown. Naturally, wave (i) price high is also a critical wave marker. 

Again the Fibonacci projections works well for now on multiple time scales.

There is some bear hope though. Perhaps we have a 5 wave move down on the Wilshire5000. However the SPX overlaps so its not the top count.
MUB down on volume. And why wouldn't it be? Municipalities going bankrupt will do that.

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