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Wednesday, April 16, 2014

Elliott Wave Update ~ 16 April 2014

Three waves down since the all-time high. That is corrective by Elliott Wave rules (unless it is a series of ones and twos down).  So the primary count has to strongly consider that new highs are coming:
We have a more classic extended wave [v] of 5 count shown in the SPX. Either way, both charts suggest the same thing so don't get hung up in the squiggles. Target 2000 SPX if this count pans out.
The count of a series of ones and twos down is not likely because the subwave two is bigger than the higher degree wave two which is less than ideal in EW theory.  You can see this with simple channel line overlays. In a nutshell, the second wave two rebound is bigger than the first wave two which makes it not likely a second wave two and thus the count is suspect.
The best bear count I can come up with since the all-time Wilshire500 high is an expanding leading diagonal triangle count and it would look something like this below:
Here is the gold updated chart. I noticed MISH was pounding the table for gold and linking an article on how Goldman was saying gold is going to $1050 yet you shouldn't listen to Goldman Sachs because they frontrun the "muppets" (public). This is of course probably true that GS does frontrun the muppets but in the case of GS's $1050 target for gold there is an EW pattern that does indeed point to this $1050 price target.

Is everything a contrarian play with GS's calls as Zero Hedge often suggest (and prove to be mostly right)? If Goldman Sachs says gold is going to $1050 should you take the opposite stance? In this case the wave pattern suggests that GS may be perfectly correct in an eventual downside target of $1050 in gold. That is where support lies.

A price rise above $1392 would invalidate the wave 4 triangle.

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