Custom Search

Tuesday, March 10, 2009

Elliott Wave Update ~ 10 March

Wave 4(5) has started. The only "expectation" (if you can have any in this market) I have is that the gap at 729-734 will be closed. NASDAQ rallied a full 7% already.
There was a textbook inverse head & shoulders (IHS) breakout. The upside head and shoulder target is about 721-722 so perhaps it met it already. After the IH&S target, usually that will signal a short term pullback. If this is a 5-3-5 zig zag type rally from bottom, we should expect a "three" corrective at some point likely early tomorrow. 724 is resistance and I would think profit taking and a lot of trapped shares will be selling the rally.
So look for a quick pullback to a Fib level or a support level I have marked on the chart after this initial bullishness subsides (which futures shows a pretty good hourly doji/shooting star at 719 so it may start to pullback already). Typically these wave 4-type rallies are fairly quick affairs with shallow pullbacks in the middle. 697-701 should be solid support and I would be surprised if the market retreated under this level before challenging the 729-734 gap and the next advance to wave 4(5) peak.
blog comments powered by Disqus