Sunday, December 4, 2011

The Perfect Impulse Wave

SPX - 15 Min

This is the TOS version of my 10 min option 2 count posted at EOD on Friday.After further examination of the wave structure there is a very strong case for a completion of this impulse wave and in fact this may be a poster child for the perfect Elliott Wave based on the following:

1. The overall wave count is nine waves (in red) up, which implies there is an extended wave within the structure and eliminates the need to figure out the sub-waves in between.

2. Wave 3 blue = 1.618*1 blue per the red Fib extension target

3. Wave 5 blue is nearly = .618*1 blue per the yellow Fib extension target

4. A perfect wave 5 mid channel hit utilizing the wave 2-4 channel parallel with wave 3.

5. Waves 2 and 4 blue show alternation

Though this is not my primary count, the odds are very good for this count. The main reason it is not my primary at the moment is due to the fact that the wave structure off the top is still too corrective as detailed in Friday's 1 min EOD chart. I am also watching for this wave's potential to extend further into 13 waves up.

Keep in mind though because this wave down is corrective does not mean it cannot be the start of wave 2/b down, which is consistent with my larger degree primary count. This is because wave 2/b is a corrective wave.

The easiest tell come Monday will be should the market bounce at the open and it turns into an impulse wave up, there is a very good chance a 13 wave impulse up is in progress.

However, should the bounce look corrective, then I will make this count (option 2) the primary.

Below are both options again for a visual example:

Option 1
Looking for a 5 wave impulse up.

Option 2
Looking for a three wave corrective move up. 
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