Wednesday, September 30, 2009

Getting closer...

This morning's price action got me a bit excited when we initially sliced right through the support line with hardly a 2nd look (and on very high volume), but the bulls stepped in and grinded it higher nearly the rest of the day until the volume came back and pushed it lower.

I was able to eliminate my original bullish count as things were not 'acting' like a 3rd wave at all. Especially when you consider the regular bullishness that accompanies the end of month/quarter, and the bulls couldn't do it. So that leaves me with a new bullish scenario: the B wave triangle.

In this scenario the bulls have one more higher high to go before the current wave pattern is complete. Will it be primary wave 2 top or another 'x' wave, we won't know until we see how the move off of the new high goes. But one thing is for certain, triangles form at the end of a move and their reversals are nasty. Based on the size of the current triangle, the follow through to the upside should be no higher than 1095. The only EW requirement is a higher high. Look for a move above 1065 to get things going.

This bear chart shows that even with all the bullishness at the end of quarter and the key support line, all the bulls have been able to do is wind up the price action for a very nasty drop. Will it be the dreaded 3rd wave or just another C wave, we will see, but certainly a break of this trendline will cause a run on a number of stops that should trigger more selling. Look for a price below 1045 to get things going.

I'm looking forward to seeing where price opens tomorrow.


  1. Hi Rich

    I just started reading about Elliott wave international. And I took a subscription.

    Do you have by any chance some older EWT or EWFF issues from 2008? If so could would you mind sending them to my e-mail (