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Elliott wave and Fibonacci analysis on 012109


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Elliott wave zigzag, motive wave, corrective wave, counting waves, Fibonacci extension, Fibonacci retracement, Fibonacci confluence are profiled in this report by

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Elliott wave and Fibonacci analysis on 012109

  1. 1. 1/21/200911:20 PM Pacific The short-term count and ratios work best for 5 waves down, 3 waves up, and 3 waves down. If these counts are correct, and given the retracement today following the recent 3 wave count from A-B shown below, then there is only one possible pattern we could be in, and that is the C wave of an expanded flat correction following the 5 wave set down. The projection for the same pattern in the NASDAQ e-minis is quite a large move as you can see in the next chart. These are not the only options but they are based on a 3 wave count down from last evening that abruptly reversed this morning and took out the backstop high of the expected 4th wave and aborting a 5th wave option. In the NASDAQ e-minis below you can also make out another option. If the last wave down was 5 waves instead of 3 waves, and since the move down from A is a .618 extension of the 5 waves down from the high, then it could be a completed zigzag down. This is the reason it was indicated as the first target on Monday evening.
  2. 2. 1/21/200911:20 PM Pacific There are other options too. If the entire move down just completed the 5 wave set today, then the retracement could look something like the next chart.
  3. 3. 1/21/200911:20 PM Pacific The fib ratios for that last option don’t work out very well, but the cleanest ratios were aborted today with the reversal, unless of course the expanded flat thesis prevails. However, I find the targets projected for the C wave in that scenario a bit unrealistic for one five wave set without some sort of catalyst. So far all of the options that I have shown you support higher prices over the short-term. There is one scenario indicated on the next chart of the NASDAQ e-minis that doesn’t support higher prices. This scenario is negated if price moves above 2 as labeled on this chart. Given the strong reversal and a 3:1 scenario ratio supporting higher prices, there is a bias for further upside. However, the fib ratios are poor for these options and the divergence between e-minis of the S&P500 and NASDAQ100 make corroboration either way more difficult. I am going to wait for the next clue. TMD/DW The market detective provides personal market opinion based on sound technical analysis and research. However, no warranty is given or implied as to its true reliability. The market detective will make errors and mistakes. The market detective is not an investment adviser and is not making recommendations to buy, sell, or place orders relating to the futures contracts, ETFs, or stocks that he writes about. The responsibility for decisions made from information contained in this service are solely that of the individual subscriber. The individual must fully research and make his/her own decisions before acting on any information provided by the market detective. The market detective assumes no responsibility for subscriber investment or trading results.