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Monday, May 16, 2011

Elliott Wave Update ~16 May 2011 [Update 9:09PM]

[Update 9:09PM: The DJIA is sitting very near the Supercycle upper channel line. If prices are going to catch  a bid and complete a medium term 5 wave move up in the DJIA, here would be a logical place to do so.

On the flipside, if prices are going to crash here a bit, this again is the logical place to do so if it loses the channel line. So lets watch that channel line.
The wave evidence has everything overlapping which suggests the market is not impulsing up. At best we can imagine a big ED count, but it would have to "launch" the 5th wave like ASAP.

We do have a positive divergence on the SPX hourly chart RSI but its not really backed up by market internals. For instance on the DJIA chart above, there is no telltale positive divergence in the breadth thrust indicator nor on McClellan's as we have had many times on P[2].
NYMO doesn't really scream "buy me" either.
I haven't forgotten the Minor 4 triangle count.
[Update 5:35PM: Taking another look at the possible truncated high in the indexes.  I really feel we have to pay attention to this because a badly truncated top means the market may have a bit of a price collapse coming (likely starting tomorrow) as a result.  If prices hold up then I reserve judgement until time reveals all.

But this is how I would count a truncation:

[Update 5:04PM: A closer look at the NYAD high and how prices have been unable to match so far.]
[Update 4:51PM: NYAD count.  The RSI is waning.  A perfect little wedge formed at the high. Whats interesting is that the peak on the chart below coincided with what could be a truncated wave 5 top in equities. See the Nasdaq count below.]
The DJIA is the only index left that doesn't have severe overlap in its waves. The Nasdaq Composite broke down rather hard today.

Did the Nasdaq truncate?
All I know is that reality is pretty much succinctly summed up in this article here:

Its a Ponzi waiting to be unraveled.  I of course postulate that Ponzi's unravel at lightning speed.
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