Friday, March 20, 2009

Some nice weakness today, Monday should see more

The overnight action was negative, but the market had retraced those losses by the open and tried to keep option owners guessing. We eventually sold off, had a nice bounce, and then sold off into the close. Overall, a very nice day for the bears. We're coming up on a critical junction for the bull/bear case. Here's where I'm putting my money:

- I favor the bear case most (just because we haven't seen a 5th wave).
- A close above the 8SMA on the 60min SPX chart before we break 749, means that the
bears somehow missed wave 5 or we're in a larger corrective pattern. In any event, we should see an immediate retest of the rally highs. A failure, and then a swift down move to test the lows. 713 will likely hold on a closing basis, and we'll be ready for a massive wave C up.
- Should 749 break before a close above the 8SMA, then the bulls don't have what it takes. We will likely test 734 before an end to the 1st wave of selling, have a bounce up to the trendline with another failure, and be looking at the March lows in no time.

So that's it for now. Have a great weekend.


  1. your count is tarrific. Any how I use 9sma with
    my wave analysis.

  2. Hello Rich, i think we are the last Elliott believers that we are yet on minor v. However, i don't have time to see a lot of blogs. Despite this, how you count the Nasdaq movement? As you know, i usually count SPX and DAX and if you see the DAx's count, in my blog, you can see a perfect ending diagonal triangle. This is one of the reasons that i believe this is the minor wave v. However i have some doubts with Nasdaq count. Great work and a great weekeend. Filipe.

  3. Rich,
    I enjoy your charts and your insight. Both Prector and Larry P (the tiger) have said that 666.79 is the low for the cycle. For the past 2 years I have also followed a timing model that is very good at . He says Mar 23 - 27 low then 50% retrace through Labor Day. Using his trend lines has allowed my clients to make money when the markets rise and be whole when the markets decline. (401k business). Appreciate your work.

  4. Proton - glad you've found something that works for you.

    Felipe - I'm lost on the nas count. Some larger pattern may be at work here or it may be in an ever different count since it never reached new highs like the SPX from the 2000 low. I'll be watching the 749 area for clues on the market trend. No need to be a hero here on the short side, so I'm taking it one day at a time.

    Randy - interesting info. I'm looking forward to next week for some more pieces of the puzzle.

  5. Thanks Rich!

    I chart the DJI, and lost my confidence after the DJI flew past 7200. I had to wait to see more of the wave, but it was a relief to see my count agreed with yours once I got my bearings again.

    Even the Fibonacci ratios fit better now.

    Thank you for sharing your knowledge. You have no idea how helpful it is.