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Monday, November 12, 2012

Elliott Wave Update ~ 12 November 2012

I wouldn't be surprised if the market takes a shot at regaining 1400 resistance but it doesn't have to. If it did, it would still fit our series of 1's and 2's as the third wave two before the bottom drops out in a "third of a third" wave down.

Primary count is a series of one's and two's. The Breadth Thrust indicator shown on the DJIA chart below supports this count.
Yet the DJIA count may be suggesting a bounce of bigger size and perhaps duration.  Of course if (ii) turns out to be a truncated top (as EWI suggest), then this count is out altogether. Could be a red herring.
And the Nasdaq100 count may suggest something else again. But as nice as this count is, its nothing to hang your hat on as its only a subindex.
 Yet price action is certainly not in the bulls favor. This Wilshire channel chart shows what I mean:
And overall, our favorite Breadth Thrust Indicator is not yet oversold nor is there any positive divergence suggesting a rebound.  This indicator favors the primary count of a series of 1's and 2's and the market has not quite yet had its "third of a third" wave.

Doesn't mean prices won't rebound, its just saying that this indicator is not flashing a bull signal nor is it oversold and, in theory, may agree with the series of ones and twos down.

Additionally be wary of the lower wedgeline break.

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