Waiting on Santa

The cash S&P500 has essentially moved sideways over the past two days. Wednesday was uptrending and yesterday was an “inside” day. The price action has caused Tuesday’s low of 1435.65 to become both a price fractal and a CIT.

Of encouragement to the bulls is that the market is holding at these levels with the RSI indicator holding above the 40 level. This is what you would want to see if we are transitioning back to a bull market.

Another Elliott Option

We have had two downtrending days since my last post. These postings will be a bit less frequent through the Holiday period.

Today I present another option for the Elliott Wave Count from the July high. It is also a bullish count for the near term (as actually the Contracting Triangle scenario was). In this count the market ended an a-b-c Expanded Flat pattern at the Thanksgiving (November 26) low. Wave “c” in this pattern was a five wave terminal impulse pattern. This option has been shown in this blog previously.

From the November low I now have wave 1’ and 2’ labeled, with wave 2’ being a large Expanded Flat. Some interesting relationships here:

1) wave 2’ ends at the 61.8% retracement area of wave 1’

Within wave 2’:

1) wave c” is 138.2% of wave b”

2) wave c” is 300% of wave a”

Additionally, note that both wave a” and c” are along the Gann Line shown by the down sloping red line. Let’s see what happens.

Elliott Wave Musings

We had a clear downtrending day last Friday as the market appears to be breaking out; to the downside, of the 1470 -1490 congestion zone. The upward moving price pulse from the 12/12 low is over at the 12/13 high. The price high of 12/11 is now also a CIT (Change-in-trend) besides being a fractal.

Today I present an update on my Elliott Wave Count from the July high. It shows a developing Contracting Triangle pattern (a-b-c-d-e). The big issue now is whether the “d” wave was complete at the recent December 11 high. If it wasn’t then I may just have the wave degree off. That is, instead of the move from the November 26 low being an a’-b’-c’ zigzag it might be one less degree; an a”-b”-c” zigzag. This would mean that we are now in b’ instead of e; a big difference.

In any event, if wave “d” is in fact complete then we can draw the a-c and b-d trendlines as shown on the chart. Wave “e”, the last leg of the pattern, can not break below the a-c trendline which is at about 1415 now.

Time will tell!