The S&P has finally begun to sell off after being in an extended Wave 5 for quite some time. Over the last few days we have seen a small rally, but is this rally going to break the previous highs or are we looking to continue lower?
The levels that I am watching over the next few days are the Ellipse which has just closed at 1100.00 and also the 61.8% Fib Level at 1110.00. If this market is to continue lower we should hold either level, in Elliott Terms we would most likely be seeing the Wave 1 and 2 forming if this pattern develops. If we break these levels the market has a much higher chance to take out the Jan. 19th high.
As for trading this move, we are on the edge of havinga perfect False Bar Stochastic Selling opportunity to take advantage of or if these levels are broken be on the lookout for an XTL Breakout.
Ron Wheeler
eSignal Learning
Respected Ron,
Today $SPX,$INDU & $COMPQ crossed 61.8%. Now What?
Posted by: samir ghadiali | February 19, 2010 at 09:18 AM
Samir,
I was thinking the same thing, particularly since my Advanced Get is telling me we're on a Wave 4 Up... Elliott rules state Wave 4 can never overlap Wave 1 (i.e., cross into the same price area). Hmmmm....
Posted by: Maxwell Smart | February 20, 2010 at 05:53 AM
First, head fakes are allowed, an unsustainable spike above the .618 if I am not mistaken. Second I fully beleive that this is, as you have suggested, an EW2 instead of a 4 and IMO, this is not bound by the .618 factor. I have seen 2s come up pretty high, not breaking the 5 tho. Plz correct me if I am wrong. ALL waves, the month, the week and even the day are IMO set up to fall now.
Posted by: katzo7 | February 21, 2010 at 04:41 AM
We're close to a cross, the way I define a true cross is a complete bar above the 61.8% level. So while we "poked" above we are still in my mind testing. If we do ultimately break it we would be looking at new highs.
Posted by: Ron Wheeler | February 22, 2010 at 02:01 AM
It is true, in some cases Wave 2 can retrace fully back to the Wave 1. Most of the time however Wave 2 ends near the 61.8 level.
Posted by: Ron Wheeler | February 22, 2010 at 02:03 AM
Any thoughts on the count as presented by the Advanced GET software? On the daily, it's showing a wave 4 up. Bob Prechter is showing a very different count, I'd like to know that I can rely on these tools. From your screen, it looks like you don't trust the count either.
Posted by: Shane Merritt | February 22, 2010 at 06:45 AM
It seems market should head lower. The rally we saw was type2 rally in 60 mins and its sold off after hitting the mob. In weekly its broken after hitting long term ellipse which is .618 from pivitJ and .50 from pivot P. With stoch sell in monthly it seems market is heading lower. And more chances of breaking the 2008 lows. I hope I am wrong.
Posted by: Sumeet | February 23, 2010 at 09:29 AM