Monday, August 29, 2011

The Market Pulse



Picking up from where we left off last Wednesday, the above chart shows that I was looking for w.v circle where w.(i) had completed. Today's close above the origin of w.(i) or 1206.75 negates any interpretation of a fifth wave and my interpretation is invalid. 

Tonight we'll explore an alternate count.





W.iv circle appears to be unfolding as a W-X-Y, double zig-zag. Several Fibonacci levels ( 1120, 1228, 46-49 ) are the levels I'll be watching for failures and the termination of w.iv circle. Notice that price remains within the corrective price channel suggestion that this rally is corrective and not an impulsive move. On a closing basis, a break above the upper boundary would cause concern for this view.



Helicopter Ben's Meddling Stops The Bleeding

The rally from 1097.5 has the distinct look of Bernanke meddling. Did the market anticipate that he would leave the door open to further stimulus and then rally even more upon the FED's statement? Did the FED talk a good game and place a floor right under the market for a second time? I'll let the market provide that answer.

Even though the bulls are getting a bit brave with the Bernanke Put by their side, I see nothing to indicate that a new impulsive wave has begun. The 2007-2011 analogy that I've been following suggests that today's move, albeit slightly different, at the daily chart level (see charts below), in 2007 still suggests that a final round of selling will occur and draw prices below 1097.5.




The highlighted section shows that a new recovery high did not occur before completing another sequence of selling whereas.....


.... today's rally made a new high adding uncertainty to the overall minor degree interpretation.



 


While the daily and intraday chart levels deviates from the analogy, the monthly chart level that was show in my Global Gains video clearly shows that the larger degree is still very much intact and the rally was called for off the lows.  According to the analogy, the rally ends by months end.

Let's see what happens in the next two trading days.


Best of Trading





Posted by Mike at 7:03 PM
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7 comments:

  1. MapielAugust 29, 2011 at 8:22 PM

    Hi Mike,

    I counted fifth of the fifth of the fifth on 5 min chart of the S&P. I started first wave from 1134.2 (it would be wave b of Y on your chart). If my count is correct S&P would drop to between 1192.0 and 1186.8

    here are my screenshots:
    http://www.przeklej.pl/plik/screenshot-1-png-002cbt1eg6jo
    http://www.przeklej.pl/plik/screenshot-3-png-002cbt1ii5a5

    I would really appreciate your comment on that.
    thanks mate

    ReplyDelete
  2. MikeAugust 29, 2011 at 9:37 PM

    Mapiel - you're on the right track but I would look at the 60 minute chart. It looks incomplete from w.b.

    Also, watch your wave relationships... your w.III is the shortest and a violation of Elliott Rules. You should rework your count.

    We can calculate downside targets once w.iv circle has completed.

    I'll post a chart with subdivisions tomorrow.

    Hope this helped.

    ReplyDelete
  3. MikeAugust 30, 2011 at 9:20 AM

    See my updated chart and supplement to this blog post at http://bit.ly/pPsp6I

    ReplyDelete
  4. MapielAugust 30, 2011 at 5:15 PM

    thanks for the post with subdivisions
    you were absolutely right. s&p went down close to your target area for w.iv and then up starting w.v

    what would be your target for w.v end?

    btw. I new to elliott wave but I know wave 3 can not be the shortest. In my count w.III was few pips longer than w.V in price distance.

    ReplyDelete
  5. MikeAugust 31, 2011 at 6:55 AM

    Several targets were mentioned within this post for the double zig-zag. For the flat interpretation - see yesterdays "Before the Bell" bog post

    ReplyDelete
  6. MapielAugust 31, 2011 at 5:16 PM

    What a day today! bloomberg people wondering what the hell happened and have no clue that the market did what it suppose to do according to elliott wave principle.

    I've got another screenshot:
    http://www.przeklej.pl/plik/screenshot-4-png-002cdf2nu1dc

    first of all thank you for your help so far.
    I figured it's best to learn from the best and you're master in elliott principle IHMO.

    I need to know whether the blue or the red count on my chart is correct. let me know if you spot more mistakes.

    I will send you a donation once I start making some serious 'hypothetical';) profits

    ReplyDelete
  7. MikeSeptember 1, 2011 at 8:55 AM

    Mapiel - I posted an updated chart at http://bit.ly/obLWp2

    ReplyDelete

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