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Friday, December 23, 2011

Elliott Wave Update ~ 23 December 2011

The DJIA crept above its early October high today confirming at least an almost 3 month double zigzag pattern for Minor 2 up.   The SPX, Wilshire 5000 and NDX are lagging.

Last night I suggested perhaps we get a series of ones and twos to the upside in order to get over the down-sloping trendline. The other thought of course was that there would be a "sluggish" rally that just simply works through. The sluggish, slow and steady has won that debate.

Industrials. Best guess is we are looking for the top of wave iii of (c) of [y] of 2.
Potential squiggle count using the Wilshire 5000 for form.  Its still on the upper underside of a rising trendline so until that tight channel breaks, we must assume its still in wave iii of (c) up and give it room to run.
The Wilshire5000's Minor 2 target box is 13336 to about 13845 with a preferable target range of 13606 (beating October high) to 13845 (Fib 78.6% retracement).  We are almost at the minimum target.  After minimum target is met, and all the squiggles are in place, we are looking to mark wave 2.

You can see the down-sloping trendline was pushed through today:
The Wilshire weekly shows where big time horizontal resistance is at 13770-13800.  Combined with a potential double back-test neckline resistance, this price is truly the line in the sand for the Wilshire.
SPX Daily. Yes, a solid close over the 200 DMA. The 50 should come close to crossing over the 200 DMA in a "bullish" crossing but I actually think its going to be a very bearish event even if it happens.  Why? the 200 is sloping down pretty good and the market would have a tough time to bring it back up due to the nature of the price plunge during the late summer 2011 which is weighing on the average still.
Best guess SPX count:

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