Friday, October 7, 2011

And the Good News Is...

You got the bounce you'd been waiting for.

A review of the Big Picture on Equities might be timely. But first;

SP Active Mo. Hourly
click to enlarge
Note the very minor negative divergence on the RSI.
The Hourly displays a series of 3 abc structures mimicking a 5 count with the last series = .618 of the preceding 2.
Risk is clearly to the downside.

Current Count on the SP;
click to enlarge
Please note the down and under "b" waves in both the -2- and the (2) waves.
In the first it is 1.18 of the "a" and in the second it is 1.38 of the "a".
Looking for a (3) of -3- of 5 down. And so far this count down has yet to extend in any of the subwaves. 
The 3= 2.23 of the 1.

 Will the 5= .618 of the 1 thru 3 at 1048 for barely a new low?
Or does it extend and  5 = 1.618 of 3, for instance, for a target around 800 ?

Downside Targets from Aug. 8 post
SP 500 "So hows about some downside targets;
 The A wave low of 666 was a .61 retrace of the 1530 point move up. The C wave will have some sort of Fibonacci relationship to the A wave.
C=A @ 452.50
Also the next lower Fibonacci retrace of the 1530 point move up comes in about there;
.76 = 425
 C=A in % terms, ie a 58% pullback, @ 590
 C=.618 of A @ 804"

Note the double support at around 800.
That's the good news.

Now for the bad news;
DJIA 1900 to present
 click to enlarge
Looking at this chart from an  Elliott Wave perspective it's not hard to see the 5 waves up from the 30's. Nor is it hard to see that it is currently virtually at the highs.
 The 4th wave low is around 610 in 1975 with 1000 generally describing the top of it's range. A pullback into the area of the 4th of lesser degree is actually a rather pedestrian correction.
The thought of 800 on the Dow ought to be good for survival equipment sales anyway.

Reverse chronological list of Equities posts
Update SP / CL / NG
Take a read forward and see how I did.

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