Elliott Wave Count February 2010

Review

Early February we got indeed a retest of the MA 76 from below as written in my January post. After that retest I expected wave 3 to start somewhen in mid February. Although we got a selloff down to 1045 this was not Minor wave 3. It was only the end of Minor wave 1. A rally followed (Minor wave 2) which didn't stop until it challenged the MA 76 for a second time in late February. The high so far for wave 2 is at 1112, right at the 62 % retracement level of wave 1.

Preview

Bearish count: Wave 2 may have topped out at 1112 or may have not. The action from the top at 1112 looks corrective so far, thus we may see a new high next week.

Bullish count (alt): In the chart below I added an alternative bullish count. In this count we finished wave (4) of [1] or [A] up and are already in wave (5). I don't like this alternative though, wave (3) just doesn't look like a third wave. But should the market make new highs this will be a count we have to consider and we may be on the way up to the 62 % retracement level of the 2007-09 bear market.

In the past years the market always made an important top or low in March. While my preffered Elliott Wave count suggests a top in March (wave 2) there are many cycles which bottom early March. So, a mixed picture at the moment but I hope it will become clearer after the first trading days in March.

ASX - Elliott Wave Count 24 February 2010

I recieved a nice ASX count tonight. Also the Australian index may need one more upwave to complete wave 2.

Reposting the charts... part 2

Elliott Wave Update for Tuesday:
I'm not totally convinced yet that Minor 2 topped, it's possible that we see a new high around 1115 end of this week. Should the market decline further today though than I think that Minor 3 is underway.

Reposting the count I recieved yesterday

Short term bearish but mid term bullish count

Hi guys,

no further rally so far, both counts still look good.

I recieved another count which is short term bearish but mid term bullish I'd like to post here:





The y wave could go down to 1000-1010. I expect that the bulls will try to hold that level (1000). There is also the 38 % retracement level a bit higher and w would equal y.

Edit: pictures don't work, try to fix it.

Edit 2: should work now.

Edit 3: still don't work for some reason, sorry for that, try to post it later again; the main difference of this count is that we'll go to 1000 first and after that make new highs.

Elliott Wave Count Week 7 2010

The markets rallied more than expected this week, the SPX is up more than 3% and closed at 1109.

Last weekend I posted the following chart and explained that I missed some strong updays to get bullish.

One week later the chart looks like this:

There I got my updays! The current fractal is now very similar to the one we got in July 09. If this correlation continues we should see new highs soon.

SPX

After the rally on Tuesday I had to change my SPX count: Minor 1 bottoms at 1045 on February 5th and corresponds now to most of the other indices (DAX, ASX, ES, Nasdaq, ...).

Minor 2 has already reached the 62 % retracement level and this possible a-b-c move from 1045 begins to look like a 1-2-3-4-5 in progress, currently in 3, since wave c is already twice the size of a and it's more common for a third wave to extend that much than for a c wave.

Thus, I added a bullish count: an A-B-C down completed from 1150 to 1045 and now the next impulse up to 1200-1300. This will be confirmed above 1150.

It's not uncommon for a second wave to retrace more than 62 % though. Minor wave 2 of Intermediate (1) of Primary [A] retraced almost 70 %.

Nasdaq

No change here. The bullish count is also possible for the Nasdaq though.

USD

No change here as well. Still in Minor 3 up.

To sum up, although the bearish counts are still valid the bears are about to lose again. The market needs to turn within the next few days and plunge. If not the bullish count is likely underway.

Elliott Wave Count 16 February 2010

I don't have much time this week so I can give you only a short update. 

With the rally yesterday I think that Minor 1 bottomed on February 5th also for the Dow/SPX and not only for the Nasdaq/DAX/ASX/ES. 

The ideal retracement for a wave 2 is 50 to 62 % of wave 1. This suggests a top for wave 2 around 1100. A possible target is 1105, the top of wave [iv] of 1. 

If the bulls manage to retrace more than 80% of wave 1 I'd be very cautious if you're a bear. ; ) 
 

Elliott Wave Count Week 6 2010

After four red weeks in a row the Dow and SPX closed up 1 %, the Nasdaq even 2 %.

I mentioned the possibility of an A-B-C from 1150 to 1045 last weekend. I always gave this count a low probability anyway and with the last week this chance got even tinier:

Every rally since March has begun with some strong updays. But what we saw last week weren't motive waves to the upside, it was some corrective crap. Thus, I don't think an A-B-C completed at 1045 is likely.

SPX

Last weekend I wrote that a test of 1080 is likely. On Tuesday, 1080 was tested for the first time and I thought that wave [ii] might have ended. The market sold off afterwards but the bulls stepped in and tried to break 1080 for the second time on Thursday. They failed miserably and may try it again tomorrow to make a triple top like we got one at 1150.

With Friday's action I had to change my simple zigzag count to a double zigzag count. The market is in wave c of (y) which is likely to finish tomorrow around 1080. A decline below the low of wave (x) will be a first sign that wave [ii] has finished. A break of 1045 confirms it.

I recieved the chart above by email and there you can see a slightly different count. The market would form an ending diagonal in the c wave position. The important levels however remain the same: 1105 and 1045 (or 10315 and 9835 for the Dow). ; )

Nasdaq

The Nasdaq was quite strong last week and retraced almost everything of the plunge we saw ten days ago. That's why I changed the count a bit and think now that Minor 1 bottomed on February 5th and not on January 29th. I posted this count as an alternative last weekend, but now it's my primary count:

2187 is still my preferred target for Minor wave 2. Wave (c) of [y] looks like an ending diagonal which may be completed tomorrow morning when the Nasdaq ideally hits 2187:

USD

The Dollar is still somewhere in Minor wave 3 and should rally a few percents more until this wave will finish.

Hi guys,

Hope you had a great weekend!

Gonna post my weekly update tomorrow ; )

Intraday Update 12 February 2010

I thought that there is a last wave v up missing in wave (c) of Minute [ii] but with today's gap down there'd be already an overlap with wave i, thus I think that Minute wave [ii] peaked yesterday.

A decline below 1045 should confirm this.

Since wave [i] had a length of about 60 points, wave [iii] should measure almost 100 points.

1080 - 100 = 980 - that's the target for wave [iii]. The subwaves of [iii] could look like that: 1040-1060-1000-1020-980.

Edit 10:18 AM: 1080 to 1063 was probably wave i of (i) of [iii]. Wave ii should retrace between 38 and 62 %; that gives us a target in the low 1070's.

Edit 12:30 PM: Quite strong for a second wave... The other possibility is that we get a double zigzag for wave [ii]. In this case the triangle would have been an (x) wave, yesterday's rally a of (y), today's decline b of (y) and the current rally c of (y).

Elliott Wave Count 11 February 2010

This second wave lasts longer than I've thought. Today, 1080 was reached after the market broke out of a triangle:

Tomorrow we may see another small push higher to hit the 62 % retracement.

May be, you remember that I posted an alternative count that only works for the Nasdaq:

The Nasdaq has retraced nearly everything of last week's drop thus I think the alternative count is actually the best count for the Nasdaq.

The perfect target for this Minor wave 2 is 2187. There lies the 38 % retracement level and wave [a] equals wave [c]. So, I expect it to be reached tomorrow which should complete Minor wave 2 (alternatively only wave [a]).

Different counts for the SPX and Nasdaq but the same forecast for tomorrow: a small rally in the morning and then mostly downwards for the rest of the day.

Hope it'll work. Cu tomorrow ; )

Elliott Wave Count 9 February 2010

With the move up to 1079 wave [ii] looks completed. If that's right the markets should plunge today!

Elliott Wave Count 8 February 2010

Either wave [2] finished today and the third wave is underway (confirmation below 1045) or only waves (a) and (b) of [2] are completed and (c) to 1075-1080 will follow tomorrow.

Elliott Wave Count Week 5 2010

The indices gapped up on Monday and rallied till Tuesday to reach the 38 % retracement level, and that was already the whole wave [ii]. On Thursday the SPX had plunged more than 3%, one of the worst days since months. Yesterday, the SPX had declined further and made a new low at 1044,50 before it rallied in the last hour about 2 % and closed at 1066,18.

Wave [ii] only reached the 38 % retracement - may be you remember this chart:

Zoomed in:

Back in May 08 this second wave only retraced 38 % as well. What followed can you see on the first chart: bears and bulls were waiting for a bigger retracement which never came, not until Minor 1 of Intermediate (3) bottomed more than 200 points lower.

In my January update I wrote that I expect a retest of the broken MA 76 from below.

And that's what we got:

The MA's I'm using may be strange for you but I've been using them for a long time and so far they've worked. I'm testing some new strange MA's at the moment... : ) and I wouldn't be surprised if the MA 322 will be the bottom for the first wave down. This MA is currently sitting at 950 and rising less than 1 point a day.

Minor 3 is underway with a target of 980 and the first subwave (Minute [i]) bottomed on Friday. Minute [ii] may go up above 1080 on Monday but mustn't go above 1105, the Minor 2 high. If the market went above that level it would look very bad for the bears because the structure we've seen so far could have been a simple zigzag (1070-1105-1045) and we'd be at the beginning of a big upmove. I posted the following chart in early January and explained the two possible counts for this year: "If this move down unfolds as any corrective pattern (i.e. only three waves) we can expect another rally up to 1200 or 1300 for the rest of the year."

So far, we've seen only three waves and should the SPX rally above 1150.45 this count would be confirmed. But nearly everything is arguing against this scenario at the moment and thus I'm keeping my bearish hat on ; )

A possible alternative count for the Nasdaq:

Minor 1 bottomed on Friday and Minor 2 is underway. Only an alternative count because it doesn't work for the Dow/SPX.

May be you've noticed that many others think that we're still in Minute [iii] of Minor 1 (and not in Minor 3 of Intermediate (1) as I propose). The reason why I think that this is already Minor 3 is because I'm expecting a big Intermediate (3) (2,6 times Intermediate (1) as in Primary [A]). With this assumption I get a low for Primary [C] of around 500. (and if that was only Intermediate (1) we'd get a target for Intermediate (3) of below 0... : ))

But if we assume that this is only Minute [iii] and expect normal third waves (1,62 times first waves) we get a low of 660 only for Intermediate (1), a second wave should retrace to around 940 and then the third wave leads the market to its biggest crash in history, a plunge below 150.

These calculations are based on perfect waves with common retracements for second and fourth waves and I'll be able to make calculations which are more accurate as soon as this first wave down bottoms.

To sum up:

Monday, Tuesday up to 1080, then down in wave 3 of 3 towards 1000.

Elliott Wave Count 4 February 2010

Well... now the action from the possible wave 2 top looks motive... : )

The markets had their worst day since the top in mid January today dropping more than 3 %! As I've said yesterday as soon as the market drops below the wave 1 low wave 3 should be underway.

We got a clear break of that low thus I think that wave 3 is underway. Usually wave 3 is 1.62 times as long as wave 1; this gives us a target of 980ish. Stops are placed above the wave 2 top at 1105.

Elliott Wave Count 3 February 2010

Wave 2 reached the 38 % retracement level. I warned before that wave 2 may be smaller than most expect but the action since the possible wave 2 top doesn't look motive thus I think we'll see another push higher on Thursday/Friday.

Elliott Wave Count 2 February 2010

The dip buyers returned this week and lifted the market back over 1100 in just two trading days. Wave 2 is underway now and may reach 1110 or even 1120 before it ends.

A drop below last week's low would be a confirmation that wave 3 has started.