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Wednesday, January 2, 2013

Elliott Wave Update ~ 2 January 2013

Well, an impressive 90% up day on the NYSE and NASDAQ.  Our short term wave count of Minute [ii] having topped is blown up.  And medium term, either Minute [ii] has extended higher or the market will make a higher high above 1474 SPX. It will take an equally impressive reversal to wipe out today's gains. Of course, the market is certainly capable of doing just that.

Again, stepping back and looking at the waves from the 2009 low reveals a big corrective mess. The recent price action has been no different. I see overlapping waves for a long time. Elliott wave instinct suggest this is an ending diagonal triangle at some degree. Question is did we label it too early?

One thing about Ending Diagonal Triangles, is that you can tend to label them prematurely (same problem with regular triangles).  Just when you think the pattern has ended, it twitches one more time.

Do we have an ending diagonal that is just not finished? Here is one count:
 
Here is another where we have a triple zigzag:

Of course the market has not yet taken out 1474 SPX so the primary count of Minute [ii] is hanging in there:

Wow look at the VIX drop.
XLF looks like an ending triangle:

CONCLUSION:
At this stage its a moot point (again) on the overall wave count. What we do see is that the rise since 2009 does not count well as an impulse nor even a part of an impulse. Therefore this complex corrective bear market rally of historic proportions is some kind of likely cycle-sized b or x wave (or primary 2) of a larger corrective Supercycle pattern as we have projected all along.

And the long-running overlapping waves of the last few years portends that it may be some kind of ending diagonal triangle.

So if stocks top above 1474 we may have fulfilled an ending diagonal triangle count. That is bearish. If of course stocks do not top 1474, we have Minute [ii] topping and Minute [iii] coming next so that is bearish.  Either case it favors the bears long run. Question is, will there be any bears left come that time.
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