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Wednesday, October 22, 2014

Elliott Wave Update ~ 22 October 2014

NOTE: I relabeled the wave degrees on the charts to reflect better the likely wave degree due to time and price patterns over the last many weeks. (It can always be adjusted later if need be in the longer term).

The GDOW chart may be the best wave chart at the moment to where prices may head over the coming days and perhaps weeks.(I often cite how well the GDOW traces waves). I will be watching this one closely.

As was mentioned last night, the GDOW bounce was weaker. It also has traced probably the clearest wave pattern since its orthodox peak.

First the weekly chart shows a truncated peak (less than a point!).
The hourly chart reveals a very nice EW pattern to Minor 1 down.  It would be preferable if there was a three wave bounce for Minor 2 up.  That would probably take us right about into the U.S. political elections in early November
The NYSE also traces a good pattern down.  It has retraced deeper above 50% which is of course good wave 2 territory.
The SPX has been the strongest. It has retraced above the 61.8 Fib mark.  Obviously if the GDOW holds up through early November and traces a nice [a][b][c] pattern, the SPX is likely also to do well. The only rule is that wave 2 must finish beneath 2019.26 SPX (peak).

I don't like this short term count, but hey, it has a sort of nice expanding symmetry to it.
The DJIA chart is also interesting. Not quite an official "backtest" of the broken trendline of the ending diagonal wedge just yet. Prices didn't come close enough. Remember, it took a full year to build that wedge. It need only take a 3-4 months to collapse back beneath its start point for it to look right.  It doesn't need to do it in only a week or two!


Tuesday, October 21, 2014

Elliott Wave Update ~ 21 October 2014

It was about an 82% up day for the NYSE and 77% up ratio day for the NASDAQ Composite.  Our wave count from Friday is mangled a bit.

All we can say is that on a weekly scale, the market hit a lower Intermediate-sized channel line (green).  This has produced an Intermediate-sized bounce (perhaps).  The line was important for now.
The market has 4 days to produce another Zweigh Breadth Thrust event.  It would need to finish above .618. Not quite there yet. If it triggers, we must assume the market has a very good shot of going to new all-time highs at least for the Wilshire5000 and SPX.
The GDOW bounce is much less robust so far. There are divergences going on.
There is one other trendline that seems to be important and that is the down sloping line from peak. Possible count - take with a grain of salt.- just playing around at this stage. At .618 Fib, a wave [iii]?
Or the biggest expanding leading diagonal triangle you ever saw? Again, the down-sloping trendline is likely important to the bull/bear case. Many touch points. Look at the huge gap up!
CONCLUSION:
I don't have any smart short term counts. Either the market is in some kind of wave two (or four) bounce that will reveal itself in the wave pattern at a later time, or the market made an Intermediate low and will trigger a ZBT event and eventually make new market highs.  Isn't wave analysis simple and logical?  :)

The lower green channel line on the weekly (first chart) was important.  The down sloping trendline from peak shown on the last two charts is also likely important.  

If we have any chance of a bear case, shit will have to hit the fan soon and prices must decline and decline hard. I don't like either bear charts for short term counts, but its the best I can come up with.

Monday, October 20, 2014

Elliott Wave Update ~ 20 October 2014

Wave [iv] cannot enter into wave [i]'s price range. For the sake of argument, we'll call that 1926.03 on the SPX.
Bounce counts as a double zigzag perhaps.

Friday, October 17, 2014

Elliott Wave Update ~ 17 October 2014

Wave [iv] bounce. Simplified the wave labels. Wave [ii] went "sideways", wave [iv] alternated and is sharp.
Closed beneath the 1904 weekly pivot. 

Thursday, October 16, 2014

Elliott Wave Update ~ 16 October 2014

6th down day in a row for the DJIA. Yes, it wasn't much, but it was a lower close nonetheless.

Best guess count for the squiggles:

Wednesday, October 15, 2014

Elliott Wave Update ~ 15 October 2014

As has been suggested many times, since the DJIA ended its peak in what appears to be an ending diagonal, therefore the makings of a swift market decline back to its origin has to be respected at all times. So  far this has been the case. Prices have moved well over 50% toward its minimum target.
Wilshire:
Best squiggle counts has us in wave [iii] at today's low or some time in the near future. But again, the DJIA needs to decline quite a bit more so we are best guessing here. The Fibonacci numbers work though.
Variation of the count above:
Wilshire weekly shows a bounce off of the lower Intermediate channel line (green).
Bonds are nearing or neared their rebound peak. Huge intraday yield swing (not captured on chart). Elliott Wave International (click on my links to left)  has reported that daily bullish sentiment (via Trade-futures.com) on bonds were 96% yesterday. That is extreme and due for a turn.
BPSPX "decodes" the rise since 2009 as a double zigzag. Neat how that works? Now plunging and indicating that this is at least an Intermediate-sized wave move at the least.  
GDOW chart is a perfect example of an extended wave five (into its 2008 peak) that collapses back to its origin in a short amount of time. Took nearly 4 years from [4] to [5] yet collapsed back to [4] much quicker.

Tuesday, October 14, 2014

Elliott Wave Update ~ 14 October 2014

Has Minute [ii] of Minor 1 traced out? We'll give the market the benefit of the doubt and say probably not. Certainly at one point during the midday, up volume was strong and market internals were more robust rather than not.

A good EW form (roughly speaking) would have Minor 1 travel such as this presented below. So on a larger time chart, one could expect to see a Minute [ii] stand out. So far it doesn't so it would be nice if it did.
So we are left with two competing patterns from yesterday's options.  Count 2 has the market bottoming in Minute [i] down. You'll notice it was predicted this possible final small rise and new low from yesterday's chart to form the final subwaves of [i] down..
Count 1 imagines that a series of progressive waves 1 and 2's are occurring to the downside. This count is suspect because the market usually doesn't trace waves this way.  But we have it up here in case the shit hits the fan tomorrow.  
Conclusion:

The market has seemingly "wanted" to rally for the past 2 days but couldn't get off the ground.  This could be a sign of a bottoming process for Minute [i] down of a very large Minor 1 down.   Market internals on both days were decent at least for the most part. On the other hand, its also a sign that a market that "cannot get up" may very well be a dangerous market for the long side.

The only thing that I would hesitate is that the DJIA clearly seemed to end in an ending diagonal triangle and these are usually swift declining events after the diagonal has completed. So to put your faith in a 50 to 70 point SPX bounce (Minute [ii]) takes some guts.

Tomorrow should be a telling day in the wave structure hopefully. Good Luck! Futures will probably give us a clue.