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Wednesday, March 9, 2011

Elliott Wave Update ~ 9 March [Update 9:17 PM]

[Update 9:17PM: As I postulated last night in that the triangle may be a bearish triangle we have yet another possible triangle count that supports the bearish triangle outlook. One thing I found with triangles is it pays to be creative in the counts because the most obvious counts sometimes are what fails.

We have a lot of eyes on this triangle so it will likely require an inventive count either way.
Sooner or later the real triangle will stand up. There is no guesswork here as if 1303 breaks to the downside, our bullish triangle is a failure, at least as we have it counted.

Yesterday we explored the possibility of a Minor 4 that retraced towards the 23.6% Fib, or 1272SPX. That chart from yesterday supposes the current triangle that everyone sees would turn out to be a bearish triangle.

Today we will explore the possibility that a move lower is not in the cards and that what we have is in fact a  Minor 4 barrier triangle with its price low of 1294 (which was in fact within the previous subwave [iv] price range which is what we expect anyways.)

Every triangle should have a complex leg, usually always the C or if not, the D wave.  Today and part of yesterday seems to provide the proof of a complex wave in development.  And if the triangle is bullish, and we should respect that it is, the complex wave would be the [d]. These complex legs are key markers of triangles.

Another aspect is that the final [e] wave catches you off guard and gets you leaning toward the wrong direction. So for example in the chart below a move to say 1330 could be the [d] and then a harsh reversal to 1313 would have bears salivating. But of course it would reverse yet again. That is the nature of [e] waves. By the way, [e] waves are usually simple 5-3-5 zigzags almost always.
A variant count below.  But as in all triangles, a waver usually winds up rushing the count. You have to give triangles time to develop. And a month for a Minor sized triangle is very agreeable in time.
Triangle failure would be if the market fell below 1303.
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