Wednesday, March 31, 2010

3/31/10 - SPX EOD [9:50 PM Update TRIANGLE COMPLETE?]

Mini Update

The same applies for the mini as well.
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[9:50 PM Update]

Just a quote from Elliott Wave Principle, 10th Ed., Pg 51, regarding triangles:

"In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle. Elliott used the word "thrust" in referring to this swift, short motive wave following a triangle. The thrust is usually an impulse but can be an ending diagonal. In powerful markets, there is no thrust, but instead a prolonged fifth wave. So if a fifth wave following a triangle pushes past a normal thrust measurement, it is signaling a likely protracted wave."

"On the basis of our experience with triangles, as the example in Figure 3-15 illustrates, we propose that often the time at which the boundary lines of a contracting triangle reach an apex coincides exactly with a turning point in the market. Perhaps the frequency of this occurrence would justify its inclusion among the guidelines associated with the Wave Principle." 


The above appears to fit very well with the chart just below titled "TRIANGLE COMPLETED"
TRIANGLE COMPLETED

I forgot to add that this triangle may be done. The count works, price respected the triangle trendlines (a-c and b-d) and price respected the EW 2-4 trend channel (in green). See the SPX Main Overview count below for a overall view of the channel.

We'll see tomorrow!

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SPX MAIN OVERVIEW

SPX TRIANGLE

Another boring day in the market. The top chart shows the alternation between minute [ii] and [iv]. I also like the fact that price has respected the green channel thus far. 

The channel, by the way, was drawn using the end points of [i] and [iii] and projecting for [iv] by drawing a line parallel to that one using the end point of [ii]. This is a classic Elliott Wave channel.

The second chart is a close up of what I believe to be a triangle for minute [iv].  As previously labeled on prior charts, subwaves (c) and (d)  may still be in the works. I added a red triangle trendline anticipation of this possibilty. The lines are arbitrarily drawn in once again.

The structure after the 1180.68 top may only be wave (c) or (d). One thing is for sure, price is converging so we are approaching an end here soon and a resolution to the move out of this consolidation period. 
The same levels I am watching have not changed. Breach 1152.88 and the triangle fails. Breach 1180.68 and we confirm a thrust out of the triangle and I will look for  a 5 wave move up to complete this leg off 1044.50.

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