Monday, February 15, 2010

Elliott Wave Count Week 6 2010

After four red weeks in a row the Dow and SPX closed up 1 %, the Nasdaq even 2 %.

I mentioned the possibility of an A-B-C from 1150 to 1045 last weekend. I always gave this count a low probability anyway and with the last week this chance got even tinier:

Every rally since March has begun with some strong updays. But what we saw last week weren't motive waves to the upside, it was some corrective crap. Thus, I don't think an A-B-C completed at 1045 is likely.

Last weekend I wrote that a test of 1080 is likely. On Tuesday, 1080 was tested for the first time and I thought that wave [ii] might have ended. The market sold off afterwards but the bulls stepped in and tried to break 1080 for the second time on Thursday. They failed miserably and may try it again tomorrow to make a triple top like we got one at 1150.

With Friday's action I had to change my simple zigzag count to a double zigzag count. The market is in wave c of (y) which is likely to finish tomorrow around 1080. A decline below the low of wave (x) will be a first sign that wave [ii] has finished. A break of 1045 confirms it.

I recieved the chart above by email and there you can see a slightly different count. The market would form an ending diagonal in the c wave position. The important levels however remain the same: 1105 and 1045 (or 10315 and 9835 for the Dow). ; )

The Nasdaq was quite strong last week and retraced almost everything of the plunge we saw ten days ago. That's why I changed the count a bit and think now that Minor 1 bottomed on February 5th and not on January 29th. I posted this count as an alternative last weekend, but now it's my primary count:

2187 is still my preferred target for Minor wave 2. Wave (c) of [y] looks like an ending diagonal which may be completed tomorrow morning when the Nasdaq ideally hits 2187:

The Dollar is still somewhere in Minor wave 3 and should rally a few percents more until this wave will finish.