Wednesday, December 9, 2009

Elliott Wave Update 9 December 2009 ~ That might be the start

SPX: After the market almost hit 1084 in the morning it turned back up and rallied into the close to end the day at 1096. This afternoon rally could have been the start of my long expected rally to new highs : )

The following chart supports this view:

If this pattern (some kind of a double bottom followed by a strong rally) continues to happen we should see a gap up tomorrow.

Looking at the past days, the decline from 1119 to 1086 looks a bit like a diagonal. But unfortunately this doesn't really help because it can either be a bullish ending diagonal or a bearish leading diagonal (only FED knows which one's the correct one : )).

Primary count: in (c) of [v] (last up wave)
Alternative count: already topped at 1119 (confirmation below 1029)

EUR/USD: The EUR/USD completed five waves down and is now in a corrective wave (ii), which might correct all the way up to the 62% retracement level.

A weaker dollar (rising EUR/USD) in the next few days would also support my SPX count suggesting a rally in the stock markets as I don't expect that the correlation will suddenly stop today or tomorrow.

Primary count: the Dollar bottomed (EUR/USD topped) in November and finished its first wave up (down)