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Saturday, October 10, 2009

Week-end thoughts, A Fresh Prospective!!!

Here is a whole new idea about the count for the rally from 666, Wave P2.

I went back and added the count that I posted last night, down below, along with the confirmation that it is a valid count, as seen from the Robert Balan book-Elliott Wave Principle Forex to the hourly chart above. If Elliott waves are about fractals, this is as perfect as it gets, wave A and wave C are identical in the wave pattern and structure. Just as in the chart below the trendlines are acting in the same manner, wash, rinse, repeat. In hindsight the whole corrective wave P2 now makes sense to me with this count, this is truely as simple as it gets!!! (now, lets see if Mr. Market agrees with me)

Please add comments below!!!
Your thoughts would be much appreciated on this new count.

Kevin submitted a comment about the validity of a complex zig-zag in a larger structure, I found this on the Robert Balan download I have, and it also answered a question I had, was it even possible to have a double zig-zag for a "C" wave. By clicking on the link above you can download Robert's book for free, it is an invaluable book for any Elliott waver. It covers many very complex corrective wave patterns.

Here is a new chart I came up with tonight, my bullish charts with all the options on them in Stockcharts is starting to look like alphabet soup, and it is getting hard for me to keep all the different options separated when I look at them. I started this one with no preconceived ideas, just labeled the micro-waves first, then added the larger counts afterwards. There are so many different counts going on all the blogs this evening and things are getting real confusing it was time to step back and look at things from a fresh perspective (thanks GV!!). It is really interesting how the counts line up with the trendlines, a corrective wave down breaking the trendline and marking a new one, then an impulse up to test the previous trendline, wash rinse repeat!!


  1. Col, this is a great count! This one is not one of my alternate counts, so this is brand new to me too! Nice work man!.

    Yeah, I like how you count the wave structure, but the most compelling aspect to this count is the trendline breakdown and retest. It is a very nice visual and shows how the rally is slowing down. It gives a bit more meaning to the B waves and the X wave as corrective features.

    Man I really like this count and I will be thinking about it a lot about this tomorrow.

    Thanks for sharing man!

  2. I like that count and "the ELLIOTT WAVE lives on" has a similar count. My only concern is, can you have a double zigzag as a subwave of a larger zigzag or double zigzag? I didn't think so, so I don't know how this fits into the larger picture. Would appreciate any thoughts from you or binve, I think you guys are excellent.


  3. Col, This is amazing work man! Yeah, I have read the Balan book, maybe once through, but I did not go back to see if we could have a double zigzag for a C wave. I have been fixating on it being a Five or an Ending Diagonal.

    You are right, there is a beautiful simplicity to your chart and combined with those resistance trendlines and retests, it makes for a compelling count. Maybe the most compelling I have seen yet!

    Awesome work man, you are the best!!

    Kevin -- thanks for the props man!!

  4. Thanks Binve :)

    That is the one thing I have been wondering, everybody was looking for "C" to be a five wave structure, and it just does not count out very good as five waves, at least so far.

  5. Thank-you Kevin for your comment, in the quest to answer your question, I was able to also answer one I had about the validity of the small count. :)

  6. And thanks for your answer. It's not like I "know" what is and isn't valid -- nobody does, we just have these rules that seem to have worked in the past. Doesn't it just get you that this will all seem obvious in retrospect next year?

    I think that big bottom trendline of the wedge is pretty important. The SPX has shown an almost creepy respect for it over the past few weeks, the one break (from above to below) notwithstanding. After serving as repeated support, now it serves as repeated resistance.

    I think if we sustainably break it to the upside, probably it's a third of third and we'll all need to get accordingly much more bullish. As long as we're just under it, regardless of whatever alphabet soup of patterns we have, we can maintain short positions with relatively tightly defined risk.

    Although that might result in us suffering a bunch of little scalps as it rides the bottom of the trendline for a while.

    I wish we had a count without an "edgy" component. All of the ones I see, including mine, have either a triple zigzag, or a "double double" zigzag, or a big running flat, or a sketchy huge expanded flat, or a monster ending diagonal, or then there's the huge running triangle that I have posted, as my "fun" alternate.

    Even the scary bullish huge 1-2-1-2 is "edgy" as the second 1-2 would seem less strong than the first, which is not typical for an extension.

  7. Great job Michael. This is my new favorite count. I've reached the same point in the wave count, but not nearly as eloquently as you have. If she turns at the end of this wave, then I believe you've nailed it!

  8. Great work -- a unique and original perspective.

    Any thoughts on the A:C ratios ? At the highest degree (blue ABC in caps), it appears that C might be 0.73 of A if the market turns at the trendline around 108x -- as compared to typical EW ratios for A:C of 1.0, 0.618 or 1.618

  9. Oliver- I went back and checked something close to that, the size of the 3 previous "C" waves (red), and the average was ~70 points each. That would put the top of this wave C, at ~1089. One thing that jumped right out at me earlier was the fact that all the "A" waves were larger then all the "C" waves.(red)
    Thank-you for taking the time to comment :)

  10. Kevin, I will be so happy when this wave from 666 is concluded, it has been a nightmare to count. There is the possibility, Binve has touch on this quite a bit in the past, that this rally from 666, could end up as only wave A of P2, with B still to come. That would really be a nightmare to count a B wave that could last for months.

  11. Michael,

    Nice work on this chart.

    We could be also looking at an Ending Diagonal Minor C wave from the Aug. 17th low.

    they have the same meaning, Primary wave 2 ends this morning.

    I have a hunce that the JPM and GS earnings on Wed & Thurs will be BIG moves to the downside.

    Paul T.

  12. Thank-you Paul, I forgot about the possibility of an ED, to finish everything off. Kudos to you!!

  13. Yup top might be in, heres my count for the INDU for anyone whos interested:

  14. Nice chart, and blog. I will add your blog to my list of favorite blogs this evening, if it is OK with you :)

  15. WOW, from you that is awesome, thanks Kenny!!