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Tuesday, July 26, 2011

Elliott Wave Update ~ 26 July 2011

Uncertainty rules the day, yet the market is clearly still above the center axis line of the 6 month trading range. So one could say the market is buying the rumor at the moment with an upward bias.  The NASDAQ 100 certainly reflects this upward bias.  One has to think if the debt ceiling deal gets accomplished the market may sell that news.  Maybe it buys it too. But the wave pattern suggests it wouldn't be a long drawn out buy.

Why does the wave pattern suggest that no matter the outcome of near term events things look bearish 1-2 months down the road ? Because simply Minor 1 of (C) was only 110 SPX points. Minor 3 was almost 2.619 Fibonacci of Minor 1.  Thats a long wave 3.  The sideways trading range is a deep range, not a tight contracting pattern. Its not a particularly strong market structure long term in my opinion.

So as I showed last night, the 4 major asset markets, Gold, equities, bonds and the dollar, may be putting in long term topping/bottoming patterns. It may have a few more weeks to run. We can certainly give it that. Not one asset class has broken its long-term trend just yet yet all show signs and wave patterns that is consistent with topping/bottoming pattern. So again, we await more and more squiggles to add to the evidence for each.

Triangle Minor 4 is still probably the best count for now. 1287 is still a legitimate wave [e] target. Unresolved still.

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