Elliott Wave Update ~ 15 October 2012

A small wave (ii) expanded flat is the primary count.

Bigger picture:

SPX daily candles.  Support at the 50 DMA.

E-minis

Elliott Wave Update ~ 12 October 2012

If the market has topped, and is impulsing lower, our wave squiggle options:

Wilshire hourly:

Remember, if this is a bearish wedge (primary count), then prices will turn down decisively.  So far that has been the case since the recent 1470 high. Of course the wedge ultimate hard target low is sub 1000 SPX.

Elliott Wave Update ~ 11 October 2012

Using the Wilshire5000 for superior wave form, there is definitely impulsing patterns to the downside going on. However another strong push to complete a more robust wave (ii) would not surprise me. However, as EWI likes to say: its not required.

Its a moot point as we'll likely know how overnight futures plays out on whether a Friday strong bounce will come.

SPX 30 minute. If wave (ii) has another push, the likely target zone is 1447  - 1452 SPX.

However note how the recent surge to the 1470 "test" occurred on what can be argued is an ending expanding diagonal triangle. Not only an ED pattern (which is weak price action) it may have truncated (weaker still).

Add up the following wave evidence and you have: 1) possible small ending expanding diagonal triangle with 2) possible truncation and 3) possible 2 year rising bearish converging wedge which is showing signs of not being able to break above its upper wedgeline and you have the potential recipe for a market collapse disaster.

Yes that pesky 2 year rising wedge has not gone away. More importantly is has not been nullified. This BPSPX chart shows each leg of the wedge has less and less push and loss of momentum.

Wilshire hourly chart again shows the up channel (green) is in peril.

E-minis

Logical bounce point.

Elliott Wave Update ~ 10 October 2012

We've laid out the larger counts. DJIA would probably count best as a double primary zigzag. Triple negative weekly divergence shows loss of momentum:

We still like the wedge count also as shown on the SPX below. If this is a bearish rising wedge, a collapse in prices should occur. That is the outcome of ending diagonal triangles.

 Local candle action shows prices again trying to hold 1430 support and now well below the upper wedgeline again. Yet we still need a solid "lower low" to make the bear case stand out.

One can argue that wave 5 was truncated in a very sneaky expanding diagonal triangle. If this is true, it displays weakness in the wave pattern. Hence the fairly quick and steady drop in prices so far from the recent 1370 high.

The ending diagonal expanding triangle would count as this:

E-minis