Wednesday, August 27, 2014

2000 Reached


Two updates ago it was found that the best longer-term options are the one above in color or an impulse underway beginning at this month’s low that will complete a larger impulse from wave [2].  If the option above in color is correct, the market can continue higher as a sideways correction unfolds from [3].  In fact breaking the price territory of (A) of [4] adds value to the pattern as proportionality with [2] is sought.  An impulse higher since this month's low can be the 5th wave of an impulse higher since 2014 [iv] or a 5th wave following other 5th waves that are (5) and 2014 [v].  All of these options are important to consider even though the wave count above in color is somewhat stronger structurally.


The market has continued higher and broke 2000 as was predicted (in the last update it was stated that "2000 should easily be taken out next week" and the short-term (days) indicator was marked "bullish").  On the scale above, the peak reached this week can be seen as the completion of a zigzag higher ('a' to [i], 'b' to [ii], 'c' to [iii]) and this works well with the larger context that suggests that any type of sideways correction can be underway since (5).  This requires the sell-off since the top to be the start of an impulse and this is at odds with the short-term action however.  A better option is an impulse still forming since the wave (A) low that is part of a larger zigzag.  This zigzag can then be an 'a' or 'b' wave of a larger pattern such as a flat, triangle, or double beginning at (5).


This is a partial update.  For the important parts of this update as well as the analysis of others, please visit http://ewaveanalytics.com.

Saturday, August 23, 2014

Friday 8/22/14 Market Update



For my update this weekend, please visit http://ewaveanalytics.com.  Remember I do not use primary or alternate wave counts and the charts above do not weigh the possibilities.

Wednesday, August 20, 2014

Correction or Impulse?

Today the entire Elliott wave update seen at http://ewaveanalytics.com is available below.  If you like what you see, please take advantage of our free 1-week trial and enjoy the views of others and a consensus opinion.  If you followed our trading advice, you would have made more money over the past few weeks than you would have from simply holding long or short.


The market's rally to a near new all-time high has caused some of the wave counts using an impulse in the wave 4 to 2014 [iii] position to move to as good of a standing as the wave count above in color.  As mentioned many times in the past, this wave does not count well as an impulse due to the size disparity between [ii] and ii of (i).  These two correction are 2nd and 4th waves, respectively, within the same impulse if there is an impulse from 4 to 2014 [iii].  The reason for the change is due to the fact that the size of [4] if underway seems a bit small relative to [2].
If there is an impulse from 4 to 2014 [iii], there is nothing wrong with an impulse from 2013 [iv] to (3).  With this there can be an impulse from 2 to (3) and a larger one from (2) to [3].  This implies a sideways 4th wave underway or complete beginning at [3] that is paired with 2nd wave (2).  This is basically the same action expected if an impulse is underway since 2014 [iv].  This is expected if there is an impulse higher from 4 to 2014 [iii] and an impulse from 2 to 3 where (2) to 2014 [iii] forms a larger impulse.  Then (2) is the 2nd wave paired with 4th wave from [iii] to [iv] and (1) is the 1st wave paired with an impulse underway since [iv].
Other possibilities than the two discussed in the above paragraph or the one in color introduce undesired features outweighing any improvements made so are therefore weak.  For example an impulse higher with the core within wave 5 no longer uses 4 to 2014 [iii] as an impulse but goes against the natural features in the chart; the wide open non-overlapping area in 2013 and momentum gain through that time that are typical for 3rd waves.  Similar is a 3rd wave impulse from (2) to 2013 [i] which requires a huge move after 2013 [ii] relative to (1) that would be 5th and 1st waves, respectively.
The wave count in color uses a structure that is better than the two good options discussed above during the [2] to [3] time frame.  There is no sense in throwing it out because the correction underway can expand in price territory as it goes.  For example wave (4) did this.  But generally, wave 'a' of a correction is making a statement about how large the correction will end up being.
On the above scale notice that the sideways correction underway from the 2014 [iii] high has been eliminated.  Also a triangle during 2010-1 has only a weak chance due to the difficulty finding an impulse higher since (2) that is incomplete; now something undesirable in addition to an impulse from 4 to 2014 [iii] is required.


The sell-off from the last all-time high is now almost certainly a double zigzag.  If a correction is still underway since (5), the wave higher since A must eventually prove to be a corrective wave.  This can be B of [4], wave 'b' of a sideways pattern from (5) like a flat, 'a' of a zigzag or flat, etc.  So  many things are possible here so it is important to keep an open mind.
When considering the structure higher since A, a double zigzag or impulse wave come to mind first.  The impulse wave would have its core within the (a) of [y] position and can be wave 'a' of a larger zigzag-family pattern.  A triple zigzag is also possible and works reasonably well with the structure of the legs higher, but these patterns are quite rare.  Only this pattern allows for a complete rally at today's high or a bit higher.


The chart above outlines what the zigzag legs look like if the triple zigzag option is true.
The biggest question in the short term is what is the structure after [x].  At first it seems like [1] is the core, but it is so early on in the wave that [3] could be the core which is well-centered in time even though it is smaller than [1] in price.  Then there is a question about [1] being 1 or 2 impulse waves meaning that ii to [3] can be an impulse or [1] alone can be an impulse.  These characteristics give rise to a vast amount of possibilities.
The important thing to notice here is that the wave higher since [x], a zigzag or impulse, is losing momentum as can be seen through the wave overlap.  In addition, the prospect for a zigzag higher since [x] is not good due to the possible locations of 'b'; all suggest very disproportionate 'a' and 'c' waves.  Putting everything together, upside looks very limited in the short-term before a small pullback begins that should be about the same size as [x] and (b) although likely more shallow.
Final Analysis:
In the short-term, a rally into the mid-1990s at highest is expected before a small pullback ensues.  The upper 1970s may be the lowest price reaches before the rally continues.  Getting under 1969 will be signal that a triple zigzag higher since A has completed and the market is heading down to test this month's low.
New all-time highs are expected where an impulse or corrective wave higher is underway since A.  If not an impulse, there are many possibilities to describe action since [3].
The longer-term possibilities now suggest an additional 5-wave advance since A is underway or a sideways correction since [3] is in its early stages of developing.  If there is a sideways pattern underway, the rally taking place since A can blow above the last all-time high without invalidating the pattern. In fact a widening of the wave is expected so proportionality is found with wave [2].
A triangle from 2010-1 likely did not unfold.  It is most likely that an impulse higher is underway since [IV] in 2009, although it cannot yet be ruled out that a sideways pattern from i to [2] is a 'b' wave or that there is a double zigzag higher unfolding.

short-term (days): neutral to bullish
medium-term (weeks): bullish
medium-long-term (months): bearish
very long-term (years-decade): bullish