The Market Pulse

The Bull / Bear Debate Continues

Introduction:

Earlier today I posted a special video addition of Heard On The Street that updated the current status of the 2007-2011 analogy and my expectation for the progress of the pattern. If you haven't watched that video, I recommend that you do so because this update expands upon the content provided and breaks down the intraday wave count from a bearish view. One without the other will not make much sense. You can listen to the call here.

The Bearish Case:

Here, the bearish interpretation at the daily chart level, has me looking for continued selling pressure followed by a three wave advance to complete w.E. A bounce may intervene but the larger trend shall remain down.



At the intraday chart level, this chart depicts the anticipated progress of the pattern (please click on the video link to obtain for further commentary).

The Bullish Case:

In my opinion, two bullish interpretations hang by a tread and one or both may be eliminated within the next few days, leaving no bullish counts. 

At the daily chart level, the running triangle is still viable. Today, the market gaped down but gaps are not usually found in second waves, they're found in third waves. Also, according to the rules and guidelines of the Elliott Wave Principle, w.2 can't exceed the origin of w.1.  A break of 1291.25 negates the viewpoint that w. 5 was underway.  Only a break of 1252.25, the w.c low would finally extinguish this view. 

The second pattern is the running flat. Flaws already exist in this interpretation. If you recall, w.4 overlapped w.1 but not on a closing basis. A small degree of leeway was granted as the DOW and NASDAQ did not confirm the same structure. That was then. Prints below 1291.25 negate this interpretation.

Let's see what unfolds tomorrow.

Best of Trading