Not sure if all this will post but it could help explain the
bigger picture of the ABC correction with the C wave up (possibly
starting) and then still a DOWN market wave to follow to new 2008
lows. There are no charts here but this is most of the text
from the Elliott Wave site Wavespeak.com from this weekend's
update. Might be worth reading after the market closes as
this is a longer term perspective and they have been recommending a
cash position until the near term direction was clear.
The indices took a major beating on Thursday,
thrusting the Blue Chips back below August’s lows as was set up by
the price pattern at the end of last week. In the process of
falling off a cliff, the Dow and SPX moved below their key downside
levels, sending yet another blow to the small possibility that a
bullish outcome will occur. To be sure, this is setting up at least
one more big multi-week decline that carries all indices to new
2008 lows and beyond – but not yet. If you’ve been following along,
you know that the pattern dictates a larger upward correction off
July’s lows before the overall decline is ready to resume. With
price reversing higher off its lows today, it’s possible that we’re
now embarking on a much larger advance, one that will carry price
to the final high of this choppy upward move. That should make for
some interesting – and tradable – action in the coming week.
Over on the NDX, continued weakness leaves no doubt
that all upward movement off March’s low is corrective, and that
the overall downtrend is still dominant. As recently indicated, it
may take quite a bit of posturing before we find ourselves at new
lows, especially considering the setup on the Blue Chips. All of
this will be discussed in detail below. Once price is fully
considered, we’ll look at thetechnical indicators and a number of
interesting readings.
ELLIOTT
After weeks of indecisive movement, price took a
much more directional path this week. Price set up this week’s
descent last week, and the indices obliged with a notable sell off
that drove price to its lowest levels it’s seen since July’s lows
were recorded. No doubt about it, this action appears bearish:
We can keep this very simple. Off May’s high, price
traced out a clear, sharp impulse down. This impulse down completed
in July, and has led to a time-consuming, choppy pattern that has
to be considered corrective. Overall, then, we’re left looking at
an impulse down followed by a corrective recovery, and as you know,
that’s the recipe for at least one more big impulse down. This was
already the likely outcome, but this week’s decline makes it even
more so:
Here’s what is
going on:
The advance off July’s lows is a large corrective
move, because if the move isn’t impulsive, then it has to be
corrective. That makes sense, given that we’ve spent most of the
past eight weeks tracing out three-wave patterns, which by nature
are corrective. As shown above, this is a bearish pattern, as it
portends at least one more big impulsive decline that will carry
the indices to new 2008 lows and beyond. That’s what’s coming, but
it doesn’t look like we’re ready to go cliff diving just yet.
Instead, it looks like we’ll get a big C wave advance from here or
near here. This move will carry price back to new highs for the
move off July’s lows, thereby completing the advance. The reason we
expect a Cwave up to occur is the form of the current down
leg. This down leg started on August 11
th, and as you can see
above, the initial moves were a three-wave decline, followed by a
three-wave advance that tested advance highs at the start of this
week. This back and forth action indicates that we’ve been in a B
wave down, and a C wave advance is needed to complete the ABC
move.
If wave C up did begin
off today’s lows, price will stay above11100 Dow and 1225
SPXat all times. From there,
trade above 11500 Dow and 1270
SPX would confirm that wave C
up is underway and is en route to new advance highs. As long as
this pattern remains constructive early in the coming week while
staying above the levels indicated, this should be seen as an
opportunity to enter a near-term long-side position. If these
downside levels are breached, simply wait for one more low to occur
before looking to get involved. Either way, an opportunity on the
long side appears to be setting up, so be ready for it.
The NDX led the descent this week. After breaching
its key downside level at 1860 early on, it lost another 100 points
before bouncing back late Friday. This action looks bearish no
matter how you slice. This is because there are only two possible
ways to label the pattern on this index, and both result in new
2008 lows, due to all action off the March low now proving
corrective:
This is one way, and it says that the next big
impulse down to and through current 2008 lows has begun. If this is
the case, we’re heading much lower right away.
The other possibility is
that a larger upward correction will form as shown here. Trade back
above1850would indicate such a
resolution, and would line up better with the Blue Chips as
discussed above. It should be clear shortly which is the case.
On the technical front, note that all indices are
now well below their respective 50-day moving averages after this
week’s beat down. Meanwhile, daily MACD has turned down and is on a
new sell signal.
Elsewhere, the Nasdaq
Bullish Percent Index matched the NYSE BPI by issuing a new sell
signal this week, the first new signal to occur since July’s low in
price occurred.
Finally, one area of concern is the fact that
Breadth still hasn’t pulled off the test of its upper band.
We’ll keep an eye on this to determine if it will
affect the potential of a large C wave up from here.
This is an interesting point for the pattern after
this week’s decline, and it should add up to a nice trading
opportunity shortly.
yep that's still possible that the whole pullback was wave B and
this is wave C, None of us know. The weakness in the NDX
however concerns us. The situation with the banks/financials
doesn't help the techs, we'll see.
As far as the market, we don't care if it rallies or falls, we
will react
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Elliott Wave
Posted by finam on 8th of Sep 2008 at 10:26 am
Not sure if all this will post but it could help explain the bigger picture of the ABC correction with the C wave up (possibly starting) and then still a DOWN market wave to follow to new 2008 lows. There are no charts here but this is most of the text from the Elliott Wave site Wavespeak.com from this weekend's update. Might be worth reading after the market closes as this is a longer term perspective and they have been recommending a cash position until the near term direction was clear.
The indices took a major beating on Thursday, thrusting the Blue Chips back below August’s lows as was set up by the price pattern at the end of last week. In the process of falling off a cliff, the Dow and SPX moved below their key downside levels, sending yet another blow to the small possibility that a bullish outcome will occur. To be sure, this is setting up at least one more big multi-week decline that carries all indices to new 2008 lows and beyond – but not yet. If you’ve been following along, you know that the pattern dictates a larger upward correction off July’s lows before the overall decline is ready to resume. With price reversing higher off its lows today, it’s possible that we’re now embarking on a much larger advance, one that will carry price to the final high of this choppy upward move. That should make for some interesting – and tradable – action in the coming week.
Over on the NDX, continued weakness leaves no doubt that all upward movement off March’s low is corrective, and that the overall downtrend is still dominant. As recently indicated, it may take quite a bit of posturing before we find ourselves at new lows, especially considering the setup on the Blue Chips. All of this will be discussed in detail below. Once price is fully considered, we’ll look at thetechnical indicators and a number of interesting readings.
ELLIOTT
After weeks of indecisive movement, price took a much more directional path this week. Price set up this week’s descent last week, and the indices obliged with a notable sell off that drove price to its lowest levels it’s seen since July’s lows were recorded. No doubt about it, this action appears bearish:
We can keep this very simple. Off May’s high, price traced out a clear, sharp impulse down. This impulse down completed in July, and has led to a time-consuming, choppy pattern that has to be considered corrective. Overall, then, we’re left looking at an impulse down followed by a corrective recovery, and as you know, that’s the recipe for at least one more big impulse down. This was already the likely outcome, but this week’s decline makes it even more so:
Here’s what is going on:
The advance off July’s lows is a large corrective move, because if the move isn’t impulsive, then it has to be corrective. That makes sense, given that we’ve spent most of the past eight weeks tracing out three-wave patterns, which by nature are corrective. As shown above, this is a bearish pattern, as it portends at least one more big impulsive decline that will carry the indices to new 2008 lows and beyond. That’s what’s coming, but it doesn’t look like we’re ready to go cliff diving just yet. Instead, it looks like we’ll get a big C wave advance from here or near here. This move will carry price back to new highs for the move off July’s lows, thereby completing the advance. The reason we expect a Cwave up to occur is the form of the current down leg. This down leg started on August 11
th , and as you can see above, the initial moves were a three-wave decline, followed by a three-wave advance that tested advance highs at the start of this week. This back and forth action indicates that we’ve been in a B wave down, and a C wave advance is needed to complete the ABC move.
If wave C up did begin off today’s lows, price will stay above 11100 Dow and 1225 SPX at all times. From there, trade above 11500 Dow and 1270 SPX would confirm that wave C up is underway and is en route to new advance highs. As long as this pattern remains constructive early in the coming week while staying above the levels indicated, this should be seen as an opportunity to enter a near-term long-side position. If these downside levels are breached, simply wait for one more low to occur before looking to get involved. Either way, an opportunity on the long side appears to be setting up, so be ready for it.
The NDX led the descent this week. After breaching its key downside level at 1860 early on, it lost another 100 points before bouncing back late Friday. This action looks bearish no matter how you slice. This is because there are only two possible ways to label the pattern on this index, and both result in new 2008 lows, due to all action off the March low now proving corrective:
This is one way, and it says that the next big impulse down to and through current 2008 lows has begun. If this is the case, we’re heading much lower right away.
The other possibility is that a larger upward correction will form as shown here. Trade back above 1850 would indicate such a resolution, and would line up better with the Blue Chips as discussed above. It should be clear shortly which is the case.
On the technical front, note that all indices are now well below their respective 50-day moving averages after this week’s beat down. Meanwhile, daily MACD has turned down and is on a new sell signal.
Elsewhere, the Nasdaq Bullish Percent Index matched the NYSE BPI by issuing a new sell signal this week, the first new signal to occur since July’s low in price occurred.
Finally, one area of concern is the fact that Breadth still hasn’t pulled off the test of its upper band.
We’ll keep an eye on this to determine if it will affect the potential of a large C wave up from here.
This is an interesting point for the pattern after this week’s decline, and it should add up to a nice trading opportunity shortly.
elliott wave
Posted by keani4me2000 on 8th of Sep 2008 at 10:53 am
possible C around 1320
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=2&mn=6&dy=0&id=p08292980956&a=150608535
yep that's still possible that
Posted by matt on 8th of Sep 2008 at 11:02 am
yep that's still possible that the whole pullback was wave B and this is wave C, None of us know. The weakness in the NDX however concerns us. The situation with the banks/financials doesn't help the techs, we'll see.
As far as the market, we don't care if it rallies or falls, we will react