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Wednesday, April 1, 2009

Elliott Wave Update ~ 1 April

Keeping it simple tonight. Upside surprise today but thats the theme of P2 I have adopted. I will keep repeating my general theme of the last few weeks that the market does not want to go back into P1 trendlines. So its buying itself some time. I pulled out the 1938 chart again and its amazing but history could indeed repeat, maybe not in time but in form.
Today's waves look like there will be some more upside tomorrow. Fib calculations take the market to 827 (gap resistance) as a 1:1 ratio for a C wave that started at end of day. I didn;t include that chart but I might later on if I can refine it.
This rope-a-dope time is all about creating and filling gaps it seems for the market makers. As I have suggested, this market is being bought on dips for now. As it traces its giant up-down moves buyers should wane a bit and some bulls may get inpatient. Eventually this price action will create the last leg down to a proper deeper retrace for wave 2. I am confident that it will indeed retrace at least 38% at some point before breaking 850 to the upside.
A lot of people set their sites on a bearish down move selloff today. I emailed Kenny last night and (half) joked that since we charted downside moves, that we'll probably get upside surprise today. Well it happened and I was not too surprised.
And then we have the gaps. I am a gap player for the SPX. The market is drawn to it sooner or later. When there are multiple gaps of decent size (3-4 points is a nice gap) then count on them getting filled. But which gaps fills first is where you make or lose money. And many thought 768 was gonna get filled first (me and it was dumb). So the market reversed and is on its way to finishing the 815 gap. This should get filled and that is based on my intraday wave count. Then there is the big gap at 828-832. So if the market gets to 827 you might bet on it getting filled. But a nasty C wave that heads all the way back down to 757 or so will fill the 768 gap first! and take your money. And then the market starts on wave 3 and heads back to finally fill the 832 gap. Thats about how it works it seems. There is no easy money...
I do still believe that gap at 768-772 is gonna get filled prior to the true wave 3 kicking off. But that is my alternate count is that this is indeed a wave 3.
And so I am betting somewhat on the 1938 pattern to repeat here.


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