Overview

Let me stand back for a bit and review the price action from last autumn’s high. As shown on the attached chart, I believe the move down into January 23 was an “a-b-c” Elliott Wave “Flat” pattern. That was followed by an “Expanded Flat” pattern from the January low into the May 19 high. This Flat is most likely the “a” wave of another corrective pattern. This implies that the price move from May 19, 2008 will be corrective: a “b” wave pattern. That “b” wave will be composed of at least three legs; a’, b’ and c’. I believe that a’ is on the verge of completing now.

Here is a quick recap of my technical analysis, the bedrock of which is that the March 2008 low will not be broken until after Labor Day.

Quarterly Chart: Bullish – supporting the interpretation that the 1256.98 level will hold in the near-term.

Monthly Chart: Bearish. Technical “sell” signal generated on the November 30, 2007 close.

Weekly Chart: Bearish. Technical “sell” signal generated on the May 23, 2008 close.

Daily Chart: Bearish with an immediate target near the 1292 level.

Although I am expecting a short-term low here I will wait for proof.