Custom Search

Wednesday, May 5, 2010

Elliott Wave Update ~ 5 May [Update 9:09PM]

[Update 9:09PM: The advance/decline chart I showed the other night looked prime for a pullback It went on to make one more bump up in a diverging squeaker high before turning down.  But now the Ultimate Oscillator and RSI is finally correcting downward along with cumulative totals of course.

But all in all, I expect it to run lower as per minimum target on the Ultimate oscillator and perhaps RSI support.
The NYMO is oversold but there are no bullish divergences just yet that we typically have seen during P2's pullbacks.  Also it is not yet at a most extreme that we have seen it.  So again, this too has room to run lower if it must and then diverge on a subsequent wave (v) signalling a wave [ii] retrace at the least. It doesn't have to happen this way but at least those conditions don't yet exist which are just as important.
[Update 6:22PM:  We have several possibilities with the subwave counts and all are exciting.  My general target area is at about 1137 SPX for a Minute [i] low. I came up with this by placing the Fib 50% marker in the middle of the blue box virgin area. 1137 is largely the H&S target zone.

SPX 1135-1142 range is  the top half of the 13:1 up candle day which is, in my theory, the next big algo dip buy spot.  The common wisdom is 1150 is a sure thing bounce spot but I think that may break under a bit.]

[Update 4:55 PM: Whatever one thinks of my overall wave count (triple intermediate ZZ with a huge (X) wave triangle as the second corrective), the triangle apex timing of the market turn on the Wilshire was spot on pretty much and good for at least 60 handles on the SPX just as the NASDAQ's triangle apex in March 2009 warned of the P1 market low (that I foolishly ignored at the time).

And yes this would be P3 by my count.  But no need to talk about that. We can only track one set of squiggles at a time and see where it leads us and play the probabilities. We'll know in due time.

Right now the media theme is that its "Europe's fault" that the U.S. market is falling. That is of course total bunk.  It is a somewhat bullish mindset.

Just a quick glance at this chart and it looks quite bearish still. Down volume red candle on bigger volume. RSI not even oversold. MACD and stochs have room to run lower.  MACD history.  Also a solid close under the 50DMA.  Nothing fancy here.

Early morning thrust down out of a triangle is probably counted best as the subwave v of (iii) low of wave (iii) of [i].  (Or if I have the wave degrees set to low, wave [iii] of 1. For now I'll keep the lower settings.)

[A slightly more bearish alternate is that today's low was only subwave iii of (iii) down. - I don;t show this alt on the chart.]

The rebound from the low to today's intraday high was clearly an [A][B][C] zigzag complete with a triangle in the middle. Then the move lower also looked like a three zigzag so far. So we could have one more bullish rise to complete an a-b-c flat for wave (iv).  Or at the very least a wave (iv) triangle that has only begun to develop.

Once again, the market needs yet another new low in the coming day(s) to confirm an overall larger Minuette degree 5 wave move. So bears cannot cheer just yet.  The market now needs the last Minuette wave (v).

Here is the primary count and I'll explain some of the wave structure. Remember, this is drawn as the "ideal" structure to finish out Minute [i] (or Minor 1 if we bump up the degrees).

1. The RSI low appears to be a subwave iii of (iii). This is normal.
2. Matching that RSI low was the most bearish downside breadth of the entire structure which matches the middle of a wave (iii) expectation.
3. The blue box area is my way of marking the "virgin" area of a wave structure in which no retrace should occur until a wave [ii].  So all the wave fours should remain below this area in general. So far that has been the case.
4. If we put the Fib 50% marker in the middle of the blue box area, we have, in theory, a decent projection for a possible price low of the entire 5 wave structure.
So in theory, everything is looking great for a total 5 wave move at Minuette (pink) degree. But yet so far we arguably only have 3 waves down which is still just a big ABC down off the high.  A bullish move into the blue box area is the first "warning sign" to bears that something in this count is not right. So again, we have our key markers. Of course the price low of wave (i) cannot be traced into until wave (v) is over! There ain't no leading diagonals here!

So again, we need a wave (v) to come after (iv) finishes out. It should generally be weaker internally (lower breadth and down volume) than was the heart of wave (iii).  The bottom price low usually shows some positive divergences on a 15 min, 30 min or hourly chart depending on the degree size of wave you are tracking.

I forgot to mention last night that any gap down today would likely be covered. It was.

Also if my structure is correct, any gap up (or again down) tomorrow should likely be covered within a day or so if wave (v) is to come. So the bulls are indeed in a pickle if they gap it up.
blog comments powered by Disqus