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Thursday, March 10, 2011

Elliott Wave Update ~ 10 March [Update 5:35PM]

[Update 5:35PM: Some more charts:
30 year yield.  Chase 'em into bonds by selling equities? Yeah thats obvious I admit, but it supports a bearish equity count.
GDOW makes excellent waves. Look at that Fib ratio!  
I might be missing a squiggle up on the CRB (one more new high) but it looks pretty nice as an (A)-(B)-(C)

I am focusing on two wave counts. The primary count is simple: The great bear market rally known as P[2] is over at 1344 having nearly reached a perfect Fibonacci Intermediate (C) = .618 x (A) in a simple 5-3-5 zigzag which is exactly the form we expect for a wave two of any degree.

The second count is that the market is working on a corrective Minor wave 4 of (C), and that it will recover to cover the 2 massive gap downs that now hang out there. Eventually then Minor 5 would gravitate toward an even more perfect Fib ratio of (C) = .618 (A) at 1352SPX and 14350 Wilshire 5000. 

The top technical reason for Minor 5 that people might consider?  Direct POMO injections keep it afloat another month or so. I have no evidence this will happen though but I realize this is what many focus on (complete infatuation with the Fed) so hey, I'll mention it.

For now I have to go with my bias that P[2] has topped at 1344.  Today had some bad down breadth.  

Head and triple shoulders. Break below the neckline.  Keeping things simple here and the internals are increasing to the bearish side of things.
Top alternate count. But the selling needs to abate at some point and it picked up today noticeably.
Top alternate count showing a Minor 5. It can, technically, go deeper for Minor 4, but for now I'll just draw it in a straightforward manner.
Is NYAD finally going to give up the 2 year trendline?

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