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Tuesday, August 11, 2009

Elliott Wave Update ~ 11 August

I think we can finally say A wave has topped. Now where do we mark the orthodox A spot? I changed the spot earlier today up to the 1008 high. That would make 1018 a (b) wave of an expaned flat. Why might 1018 be a (b) wave? Because the NASDAQ did not partcipate and did not make a new high when the DOW and SPX did. Doesn't mean its a (b) wave just that it was a fractured market so it could be a (b) wave. At any rate thats how I have the chart marked. The other thing that bothers me about the (b) wave bounce is that it was so high compared to the (a) wave. But counting 1018 as the top of the Minor Blue A wave is even more problematic if you ask me.

Regardless, by my count, we are in a pink (c) wave of an expanded flat down off the 1018 price high. That would mean a 5 wave sructure. I posted my chart on how that 5 wave structure might play out based on some wild assumptions and a pretty decent Fib confluence for 2 reference wavepoints.

FED meeting ending tomorrow will likely garner a market reaction. Depends on what the market is due for and when. So be ready for the reversal (no matter which direction) no matter what they say (or do). Remember its not the news they trade on, its the waves, and they'll use that "news" timing for whatever wave is due at the moment.

What if 1018 was the orthodox price high? That would actually be bad news if your a bull because that implies the market is just in the opening gambit stages of a B wave correction and it could go deeper than any bull anticipates. Why? Because they managed to get bullishness at quite a peak and managed to float the market high up for quite a while and all the dip buyers may be used up for now. The whole damn top could be a big distribution handoff from strong hands to weak and now we are in for a bear surprise or two.

But that is getting way ahead of things. There are many little support layers from here to 956. And major support exists in the 950 -956 range.

The support I have my eye on first is the gap up support at 987.44 - 990.22 and then 980-982 or so. Next support is then down around 965-968. Gonna play it a day at a time.

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