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Friday, July 30, 2010

Elliott Wave Update ~ 30 July [Update 9:32PM]

[Update 9:32PM: My email has changed slightly. New provider.  Its posted in the "About Me" at the bottom left.  New one is with Verizon. My old Comcast account will soon be gone so use my new one thanks!

[Update 7:50PM: How do you square this circle if your a bull calling for 1250 or whatever?  Here is the DJIA since November 2009.  You can see 3 divergences on different time scales with price and volume. This shows weakness in my opinion, not strength.  P2 did not diverge on the way up until at these points that I show here.

Here is some simple logic: If the "correction" was over, you'd think the price and volume trend would stop diverging and turn bullish again, particularly if you have a wave three of primary degree count going on or even new squeaker highs above 1219 SPX cause its gonna take some doing to chew through those big bad bear candles that produced such horrid downside market internals.

Basically we have now more volume on the sell side and not buy side consistently for the past 6 months running. That is not a bullish development in any EW book that I know of or even any technical analysis interpretation that I know of.]

[Update 4:50PM: The Wilshire weekly candle pattern and moving averages are bear friendly this week.]
Key overlap in the indexes forces us to switch to the Minor 2 expanded flat count with Ending Diagonal [c] wave as the primary count. Price action suggests that this market wants another crack at a new recovery high above 1120 SPX.  So we have a count for it of course.

And an ED means we would look for an a-b-c "pushing" move up toward the trendline in either overshoot or undershoot.
A close alternate is that the market has seen its Minor 2 high and today was just a delay to the inevitable downside to come next week.  We have a squiggle count for that too. Its a bit shoehorned but hey I am an equal-opportunity waver.
The CPC finally made a new 10- day average low. So we can say the 10 day has yet to turn up which sometimes turns up just prior to a significant market high.
 I consistently said for weeks that Minor wave 3 down in equities could not get the party started until the dollar (and Euro) have corrected in their Intermediate (2)'s.  I was proven very much correct. The traitorous dollar even made yet another squeaker low today after a promising morning.  Its settled upon good support so its trying to form a base. But again, no dollar, no Minor 3 down.

Here would be the Minor 2 expanded flat count.  We have to be flexible with the possible Minor 2 counts. I may not like this count, but if it works thats all I care about.
As evidenced by the 10 day CPC, there is still a lot of conviction to the upside.  It can go lower of course and we await to see what the market wants to do next week.
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