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Friday, May 2, 2014

Elliott Wave Update ~ 2 May 2014

The best count could still be that new highs are coming in the Wilshire5000 (and thus the SPX also).
However there is a good case to be made both long, medium and short term that stocks will turn down next week.

First the monthly presents some obvious technicals. 1) The RSI is waning over a 20 year period. Yes momentum is slowing.  2) negative divergence exists in 2014 as it did in 2007 with the RSI and MACD history. Also note the monthly "doji" candlestick.
On a weekly time scale the same divergences exist and are perhaps even more acute.
Short term the best bearish count is shown below. No its not a perfect count but they never are.
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