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Thursday, October 28, 2010

Elliott Wave Update ~ 28 October

[Update 8:15PM: Again, interaction with the Supercycle line today.  Even if it manages a spurt above, I tend to think it will be short lived as it was in April.
And why? AAII is getting pretty gnarly bullish considering even Bill Gross alluded to the system being a big Ponzi. And you know what? No one disputes that. They may dispute his motives but no one argues against it being a Ponzi. Ponzi awareness is slowly going mainstream.

Courtesy  AAII Bull Ratio
4 week MA is now above the red line (kind of like its Bollinger Bands). Highest since 2005.
Gah another late night for me.

But looking at the tape, it appears the triangle count is intact.  A positive spin to GDP and a "thrust" up out of this triangle is a possibility and would fit within the pattern here.

A thrust down could also be accounted for see chart underneath this.
Poised for an opening thrust up or down. Futures should tell the story for the open I suppose....
We have obviously some big news events which should bring both volume and volatility.  Tomorrow is GDP report. Elections and FED next week.

There is still a very good chance the major indexes eventually crack new highs above April. We are obviously close Perhaps we get some non-confirmations where perhaps the SPX does not or something to that effect.

But what would the wave pattern  be?  We have three waves from July low but likely we would need a wave 4 and then wave 5 to new highs above April.

Here is a potential scenario wave count for new highs above April highs if tomorrow is a bit of a sell day.  Its just some things I'm kicking around in my brain.  If the market intends to make a new high, I feel I need to plot a plausible wave path. This is one such possibility depending on tomorrow.

This count might fulfill my NYAD count of needing a wave 4 down in NYAD and another NYAD wave up.

Anyways you get the idea.  The "key" is of course the August highs where I have "1" marked. This cannot be breached.
Of course, it could be the "top" is in already and the market is fixing to punish the majority to include bears who were bears but decided not to be just when it was ripe to be...
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