Morning Update

PLEASE NOTE: I'm going to try to get a forum going to help increase the dialogue amongst viewers.  We'll see if it gains any traction here in the coming days.  So please visit the forum and post your thoughts and questions at the markets.  There will be a permanent link to the forum just above the most recent post.  Let's get it rollin!   ELLIOTT WAVE FORUM

Bob Prechter's Updated Deflation eBook is now available for free at EWI.  With the mainstream media and the Federal Reserve catching up to the dangers of deflation, now is an excellent time to view this free resource.  Prechter's 90-page eBook teaches how to prepare for deflation and adapt during it, but also learn how to survive it and -- most important -- prosper during it, so people can be ready for the buying opportunity of a lifetime at its end.   Check it out here for free.

The decline from the Tuesday high so far looks corrective.  A break above 1137.22 will really make it look like a 3 wave drop, correction (Elliott Wave Tutorial, 3.4).  If so, a break to a new high on the week is imminent.  Also, the Nasdaqs are leading the charge higher and the NDX almost made a new high on the week with the Composite following closely behind.  Also, the British pound made a new high cancelling out the 5 wave drop I mentioned in yesterday's post, yet now the euro is struggling.  But there's no compelling evidence to suggest a top in these two currencies, which means a US dollar bottom MAY not be upon us quite yet.  And lastly, the internals and strength of the decline fit more of a correction, not a reversal in trend......at least not yet.  I'd expect much stronger selling with much more bearish internals than what we're seeing right now if a top was in.

However as I've said before, if the indices do get to new highs on the week, they should not be long lived.


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But all is not so bullish.  The Russell 2000, the S&P 600 Small Caps and the XLF are still showing weakness relative to the major indices, and they all sport nice 5 wave impulsive declines (Elliott Wave Tutorial, 2.1) unlike the S&P, Dow and Nasdaqs.  So it's possible the S&P, Dow and Nasdaqs MAY make new highs on the week while these secondary indices lag and don't make new highs.

So we'll see what develops the rest of the day.  More later....


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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.