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Monday, January 12, 2015

Elliott Wave Update ~ 12 January 2015

Posting medium term count charts (few months in duration)  have been muddy lately which is why they haven't been posted for a while. We simply don't have any good medium term counts.  However when one looks at the long term picture, we have a very nice EW structure that has unfolded since the 2011 low.

The DOW weekly will be shown for example.

Note that wave (1) is nearly equal to wave (5). Note the "virgin wave space" is at the Fib 50% marker. Note the length of wave (3) is the longest and in very good proportion to the entire structure.with an exc excellent subwave count.  The RSI peak occurred at the expected place of Subwave 3 of (3) and has been waning ever since.

The only problem lately has been the subwave count of wave (5) which is not provided.

Also note the volume is steadily decreasing  This will matter in the long run.

The top long-term alternate:

We have labeled the rise since the 2009 low a "three" wave structure which it still is.  What would have to happen for us to change the count to a 5 wave structure from the 2009 low? Well, a primary wave [4] would have to develop. It would be a long-running sideways many month affair (perhaps most of 2015) with the market trading likely between 14700  - subwave 4 of (3) area - and 18,000.  So the market would trade in this range and develop a long -running sideways "corrective". Then primary wave [5] would advance and top out a few years from now in 2016 or early 2017.
However when viewed with the Global Dow, the long term alternate does not look so viable,  The GDOW is even more of a pronounced :"three" and is diverging. A fall beneath 2262 GDOW would nullify any long term impulse pattern.  Thats not too far away.
You can see how dangerous trying to catch a falling knife as with oil. There is support at $33.55 of course (the 2009 low).

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