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Friday, December 9, 2016

Elliott Wave Update 9 December 2016

We have been saying the ending diagonal count cannot go higher than 23780 because that would make wave 3 the shortest which is a violation of Elliott Wave counting rules. Today's high was 23,679. So we don't have much more room for the below count.

We were also looking for a hit on the upper channel line.
The confidence in the counts above being correct is fairly low. The market has surged in a historic momentum drive and usually this momentum drive takes a while to dissipate.

However we have an excellent potential trade setup here which I am not recommending although merely mentioning how you can use wave patterns to determine your trade setups.

Since Wilshire 23780 is the maximum this wave count can still be valid, you could do a massive short tomorrow with your stop being 23780. This is only 100 Wilshire points from today's close. Its an excellent setup risk/reward scenario. In fact I plan on doing just this if things present themselves as such.

Under this scenario the market would reverse shy of this mark with a solid trendline touch which you can see is not quite happening yet under the 30 minute and daily charts.

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