Friday 25 January 2008

Elliott Wave Update


The cash S&P500 put in an uptrending bar on the daily chart as the bounce off of Wednesday’s low continued.

Today I would like to update the Elliott wave count presented last Friday. If you recall I was counting the action off of the October 2007 high as an a-b-c Flat pattern where the b wave was itself an Expanded Flat. From the December 11 high the “c” wave has been developing into its own five wave impulse pattern. I now have reason to believe that the “c” wave ended at Wednesday’s low. Not only did we get a buy signal on the technicals at that point (daily chart), but the following relationships exist:

Time (most important): Wave “c” was 31 trading days and wave “b” 22 trading days. 22/31 = .7097. The square root of 2 divided by 2 is .7071. This number is extremely important in sacred geometry and is called “the sacred cut”. It has been used from at least Roman times in the field of architecture.

Price: Wave “c” is 253.52 points long while wave “b” is 85.04. c/b = 298.1%; “c” being less than 2 S&P points from being exactly 3 times the length of “b”.

This weekend I will write about how I see this Flat pattern fitting into the larger picture.

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