Monday 6/15/09 30m Chart

Today was another difficult day for an Elliott wave analyst. The morning took on an impulsive nature but then waves began to overlap. The action appeared to be an ending diagonal at first but then sideways action developed. There was a chance of a contracting triangle for a moment only to have the rally at the end of the day wipe away the possibility.

There was a gap down today breaking through 935.66 so a zigzag correction alternative mentioned on my post yesterday appears to have been the real count. The orthodox top of that correction may have been at Friday's close. But with the information the market has given us, it is hard to say whether or not we are in a corrective phase (and of what degree) or the new bear market of primary wave 3. The bullish percentage has been high for a long time now but it can still move higher.

We touched the large primary wave 2 trendline today, we may bounce off of it or break through it. We are at a critical point.

In pink there is a relationship between the last two sell-offs seen in the market. If this really is an abc correction down then the a wave is about 78.6% of the c wave. A wxy double zigzag is also in play. Of course this sell-off may develop into an impulse down, creating a wave 1 or a wave a of some larger pattern.

More notable is the clear triangle we had earlier this month. The triangle's bd and ac lines are connected and extended, they meet on June 26th. We may have an important turning point in the market on that day. Also note the impulse up off of the e wave. It reached 956.23, almost exactly the width of the widest part of the triangle (the projection was 955.81 shown in blue). This tells us that the triangle was probably a 4th wave of something, not a b wave, and the impulse to the highs was a 5th. The 4th and 5th waves of what remains to be seen. But given this it makes sense the market is selling off now. We have had divergence as well.

There are so many possible counts to explain this massive rally it is hard to say where we are at. Kenny and Dan have had great counts but there may be other possibilities out there.