Tuesday, May 25, 2010

Elliott Wave Count 25 May 2010

Who would have thought that we'll close up when the market was down 3 %?

The ES hit 1037 in the morning where it completed wave 5 (7 handles short of my target):

Either an ABC correction finished at ES 1037 or wave [i] of 3. If it is wave [i] then we should see a retracement at least to 1090 more likely though to 1105-1120.

I think that wave (a) of [ii] will end at 1090 and (b) around 1070. If that's the case there will be setting up a nice inverse H&S. The last three iH&S all failed though and led to a big sell-off so I'll be very skeptical if something like 1090-1070-1090 is setting up and wait to enter long positions until this 1090 level is clearly breached.