Well I wish I didn't post anything yesterday because I was wrong across the board. I tried going long today on the stock market and was long the EUR/USD yesterday and was stopped out on both at the end of today's US session. For those of you who subscribe to EWI's Short Term Update, the above outlook is nothing new to you. With the ending diagonal and 4th wave triangle now eliminated with today's action, it leaves the high possibility for a flat correction for wave 4 as shown above. The structure is near perfect as the rally to a new high from the wave 'a' low was in 3 waves which is wave 'b', and then the ensuing wave 'c' decline today is composed of 5 waves. All this is a textbook EWI flat correction. What this means is that wave 'c' should bottom soon, if not already, and give way to more rallying to new highs for the year before topping. A break below 1165 tomorrow or Wednesday in the S&P cash should be enough erosion in support in fast enough time to suggest that a larger top was in and the flat correction is probably wrong if a new high on the year is not acheived first. So if we get a large rally tomorrow that does not make a new high on the year and then declines to beneath today's low in 5 waves, then that too would probably eliminate the flat correction and open up the door to a more bearish scenario.
Unlikely, but Possible, Bearish Count on the Nasdaq Composite
Okay, I'm almost embarrassed to post this but I feel I have to just to leave open the possibility that a large top was put in today. I've said here quite a few times that I feel "the top" will surprise everyone, including elliott wavers. "The top" will probably not unfold in perfect 3s and 5s patterns and make it easy for us to call the exact top print in the market. So with that in mind, I see the 3 wave rise to a new high and 5 wave decline today and it certainly gets my attention because most wavers will think that 3 wave rise is a corrective move within a flat correction (just like I do, as stated above), leaving elliott wavers vulnerable to missing the top and being "surprised". Unfortunately from an EWP perspective there's not much support to suggest "the top" is in. The best I can see right now is in the example of the Nasdaq Comp. shown above. It suggests that a 5 wave rally occurred into "the top" and the 5th wave was truncated. This is very unlikely with just the shape, size and time length of the 4th and truncated 5th, along with the apparent triangle for wave 4. But I wanted to throw this up here still, just to keep our eye on it if the S&P cash were to break below 1165 soon. Being on the alert for "surprises" to a market the top, it keeps my on guard.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
1 comment:
COMPQ count.
Alternate 1: As you have counted, with 4/26 late evening spurt as truncated 5th. I counted the 5 up then, but then I thought it might backfill for a small 2nd and continue up today. But, today's red wave ii was a tough climb (as if it wanted to fill the gap).
Alternate 2: Count marked as failed (v) could be ii down and 3rd wave extended today. However, the move down from black (iii) did not look impulsive (was overlapping).
From a sentiment perspective, $50 on the QQQQ was the elusive goal. Today's wave iii just went sliced through it without even a bounce. This 'could' imply that $50 if achieved would hard to reach and hold, which would in turn lend credence to the failed (v) scenario. Additionally, COMPQ filled the opening gap today.
Thanks!
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