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Thursday, December 29, 2011

Elliott Wave Update ~ 29 December 2011 [Update 5:15PM]

Update 5:15PM: SPX Yearly DOJI candle in the making.  Year of indecision and a potential topping candle.
Update 5:06PM: If the market is in wave iv of (c) there are of course variations on how wave iv actually unfolds:

Variation one - a triangle for wave iv:
Variation two - [W]-[X]-[Y] complex combination with a triangle in the final position. Pretty similar to the variation above but more confusing and this fools a lot of people so its a market favorite.

Today saw the rebound as expected in yesterday's post due to the extreme oversold TRIN readings.  The market wasted no time in relieving the oversold.  Primary count of wave v of (c) of [y] of 2 still works.

In the Wilshire 5000 (and SPX) wave iii was shorter than wave i, therefore wave v cannot go higher by rule than wave iii as wave iii can never be the shortest wave.
Technically, the SPX wave iii is also shorter than wave i, therefore the maximum price range is limited to 1288 SPX for wave v of (c) of [y] of 2.
Daily shows another close over the 200 DMA.
INDU count. Megaphonish looking.
Top alt count has today as merely an oversold wave ii bounce.

Via the excellent Sentiment Trader:

Latest Investor's Intelligence survey shows the Bull ratio is higher than anything registered in all of 2008, that last time a multi-month wave (2) occurred of this size.
Bullish % hit 50%. Thats absolutely incredible considering the credit markets in Europe are seizing up and the United States just has gone over a 100% Debt-to-GDP ratio.
Minor wave 2 was supposed to relieve excess bearishness. It has done its job. We await Minor wave 3.
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