ChartsEdge map for 1/23; and, my own comments on Elliott Wave bigger picture

Market Map for Jan23

Posted: January 23rd, 2009
Author: Mike Korell Filed under: One-Day Market Map »


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Thanks to ChartsEdge once again!

Some comments on my own on the larger Elliott Wave picture: My working hypothesis (not a bias, a hypothesis) is that we're somewhere along the way toward completion of an ending diagonal wave 1, and that after waves 1,2,3,4 and 5 have completed, the S&P500 will be at new lows somewhere under 741. There are different numbers for that, such as 640/650, 600, 554, and even lower. But for now, the trading challenge being to see how the zigzag ABC that will form the wave 1 is playing out. I've been thinking that we should be working out the wave B, and a wave B can play out either as an ABC three-wave movement, or as a triangle. Yesterday started thinking it might be looking like a triangle ... which is frustrating for a trader trying to "play the bounce."

As a swing trader, I'm thinking I need to step back a bit and look at this hypothesis that tells me holding short until completion of the wave 1 is the basically right way to go, rather than worrying too much about the bounce. Yes - I was trying to play the bounce ... but with ChartsEdge's message yesterday saying not to expect the rally up into Friday (which did have me wondering if the rally gets postponed to Monday though), and futures where they are right now, and looking at the ChartsEdge daily map for today - it's all got me pulling in to be more conservative here.

Certainly we'll all be going back to the drawing board this weekend, when we can also measure out some targets and levels in bonds (TLT) as well as equities and other markets we're following. Meantime, be careful out there, and happy trading all!