Dow Jones Industrial Average: +61.29 or 0.63% at 9786.87
S&P 500 Index: +7.90 or 0.75% at 1065.48
NASDAQ Composite Index: +13.60 or 0.64% at 2123.93
NYSE Internals: 2205 Advance. 819 Decline.
Once again, I'm sorry for not being able to post everyday this week, I've been a little busy...
The market is continuing to confuse all of us. There is really no clear cut direction. This is why I am going to post a few charts, naming all the possibilities. We'll have to wait and see which wave structure will play out, then we can build on from there.
First count: Bearish
This is the original primary count I have been following. Price and wave top was at 1080 on the SPX. Since then, we have been starting a new downtrend. So far, waves (i) and (ii) have completed. Wave (iii) down should be starting soon.
Second count: Bullish
This recent down move was a wave [iv] and we are not starting wave [v] up to finish the uptrend. This is possible because the top of wave [i] was 1018, and the bottom of wave [iv] was 1019. By the rules of Elliott Wave, waves 1 and 4 may never overlap. 1019 and 1018 are NOT overlaps. We have also completed 5 waves up. This could be the end of wave (i) of wave [v]. This count could take us all the way to the 50% fib retracement mark at 1122.
Third Count: Bearish
This count is also in play. The price top for Primary Wave 2 was indeed 1080, but the wave structure ended today with a truncated wave 5 at 1070. A truncated wave 5 means that wave 5 did not exceed the high or low of wave 3. 1070 is below 1080. So 1080 may have been the top, but 1070 is the "top" for the wave structure. This means, we should now be starting wave (i) down soon.
This chart below shows how today could have just been a backtest of the yellow trendline that we broke. Now we have to break the bottom white line to confirm that the uptrend has ended.
Dollar was down. Crude oil and Gold were both up as a result. Neither financials or techs were leading today. VIX was down as well.
Time will tell us which count is right! :-)
2 comments:
Hi Rishi...
You are giving a valuable insite into this E.wave theory. You do not need to be "sorry"... as this is a FREE service and you are more regular than many others. Keep up the good work.
One question... given your tech analysis how would a trader PLAY this market on daily or weekly basis and make money? Thanks.
mehtas101
Well, I don't think I'm the right person to give advice.
But personally, the market at this point could go either way. After a run up of 60%+ a pull back would be natural, but we don't seem to get any significant down turn. So it could also continue to run higher before ever turning down. There are a lot of stocks out there that have nice two sided action. It's just a matter of finding those stocks.
Sometimes the best trades are the ones you don't make. :)
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