E-minis

Elliott Wave Update ~ 3 November 2011 [Update 9:52PM]

[Update 9:52PM: I love this NFLX chart. Starting to bounce up into the huge gap down.]

[Update 8:55PM: Some more charts. First IF, and thats a big IF, we are still in Minor 2 up, then the markets are likely in wave [b] of 2.  Wave [b] of 2 can take the form of a zigzag, flat or triangle or some other complex formation.  For now let's stick with the simple.  We don't know the pathing that [b] will take, but the guideline is that it usually retraces 38% or close to it.   It has come close so its possible the price low for [b] is in.

The Zweig Breadth Thrust event that occurred on the 14th is somewhat of a price "marker".  I said at the time that I respected the ZBT and probably that event is influencing the consideration of a longer-timed Minor 2.  IF there is a wave [c] coming in Minor 2, I wouldn't expect [b] to get much lower in price under the ZBT day. On the SPX that is about 1205-1224.  So a dip below 1200 would be acceptable, but not too-too low.

For instance, a deeper move to say, 1140 SPX for [b] might nullify the ZBT day which wouldn't make sense if its just a [b] wave.  Not only that but it would look and act like a third wave down which if it went to 1140 it probably would be.

Here is a closer look at that CAC chart:

I have Japan in wave (E) that requires some up prices over the next few weeks.

Of course getting even simpler, we are trading between the 50 and 200 DMA.  The 50 DMA may be due a touch point soon. But it is moving upwards toward 1200 SPX so timing the touch at what price level is tricky for now. 

NYAD double divergence coming?  Weekly and daily.

Heck could have just kept the primary count and all would be well in bear-blog land.

ORIGINAL POST
My gut tells me the market is probably not in Minor 3 down.  There are several reasons mainly:

1. Time. 5 months of decline with less than a month of retrace is not the norm.

2. Europe, such as the French CAC, could use another 5 waves up to complete a zigzag retracement.

3. Market extremes.  This is not an easy market and just like P[2] has pushed things to the limit, and then wave [ii] of 1 down pushed it to the limit and now Minor 2 would not surprise me to also take things to the extreme.

4. Certain sentiment measures could still need some strengthening perhaps. And that takes more price (and time)

5. The 7-7.5 year cycle theorized by Prechter (begun in March 2009) - of which approximately the first half of the cycle is pushing stocks up -  apparently has some push left in it.  The halfway point in time for this cycle is in early to mid 2012 where one can surmise that there will be no up cycles left in play to push up the market (they will all be aligned downward). That does not imply stocks must make a new outright high above 1370 SPX, it just implies it may have some bubble action left in it.

6. Seasonality from now through the end of the year.

The alternate is still on the table of course, but it would have to work through support at the 1215 level.   Until that happens, its easier to imagine Minor 2 is still in the works. Which means the SPX is in wave [b] of 2.

However, we are looking for a decline back down to complete some kind of wave [b] pattern.

Yes I am letting the French influence my wave counting.

E-minis [Update 10:06AM]

[Update 10:06AM: Possible wave (ii).]

I missed the overnight fun I see.

Elliott Wave Update ~ 2 November 2011 [Update 5:44PM]

[Update 5:44PM: Some more squiggles. SPX and Wilshire. 1256 should be big resistance.

The DJIA probably has the best wave structure going for it at the moment. The 30 minute chart:

E-minis

Elliott Wave Update ~ 1 November 2011

The impulsive down look of the market continues. Another quick low tomorrow would be ideal for the squiggle count.

Using the Wilshire 5000 for form but consider the SPX to be identical count:

Some of the discussion I got into last night on the last update was about how the first subwave one of a wave three seeks to advance prices below the previous larger degree wave one. This is a principle that works on all degree of wave structures.

For example if this is Primary wave [3] down of cycle wave c, then the first subwave of P[3] would be Intermediate (1).  Therefore (1) of P[3] should try and advance prices below that of the larger degree P[1] down which ended at 666 SPX.

This principle should also work well with the first subwave Minute [i] of Minor 3 of Intermediate (1). Therefore, Minute [i], in theory, will try and advance prices below that of the previous Minor 1 which was 1074 SPX. If we can extrapolate backwards, we can conclude that the market may be in sub-minuette (i) of Minute [i] of Minor 3.

This SPX hourly chart shows this projection:

Now if this projected pathing takes a wildly different course than that of a 5 wave structure down of some sort, then of course perhaps we may not be in Minor 3 down.  But for now we have to imagine that we are and we'll count it as such until and unless the waves no longer make sense to do so.


DJIA squiggles. Will we have a typical head and shoulders pattern?

E-minis