The market detective is a Chartered Market Technician (CMT). He uses technical analysis to identify market turning points and opportunities. He is primarily an Elliottician, he uses the Elliott wave principle and Fibonacci ratio analysis to uncover clues about the direction of the market. He uses other forms of technical analysis to corroborate his findings in such a way as to assign a probability factor to them.

1. 12/11/200811:11 PM pacific
Ouch. When I woke up Thursday morning and saw that the futures had traced out the
triangle pattern I wrote about Wednesday night, I became biased. I did not see this
coming at all.
Price obviously had already completed 5 waves up from what is labeled B. It is clearer on
this chart of the NQ (NASDAQ 100 e-minis) so I m showing it tonight. The two indices
only have minor variations in their patterns.
There are two options for going higher. We have either completed a 5-3-5 corrective
zigzag up from the low, which could extend up, or we have completed 1-2-(1) of 3 of a 5
wave motive set up from the low. The latter is necessary in order to support the larger
Expanded Flat thesis.
What I see on this chart doesn’t favor the motive wave thesis. The futures melt down
continued after hours and where it stopped gives more credence to a zigzag pattern than a

2. 12/11/200811:11 PM pacific
motive pattern. Looking at the two retracement zones I have labeled, price stopped at a
50% retracement of the entire move off the low. It would have been better for price to
stop at one of the retracement levels down from (1) of 3, if this was wave (2) of 3, and a
motive wave.
The possible good news is that zigzags that become double zigzags are mostly connected
together by .500 Fibonacci retracements. Fibonacci .618 retracements are not uncommon,
as you can see by the B wave that was a .618 retracement of A.
Both options for more upside are still on the table, but the retracement level tagged
provides a subtle bias. If it is a zigzag, the question becomes whether we are done or
does it extend into a double zigzag.
If we start retracing back up, 1194 is the toughest hurdle. That coincides with 874 in the
S&P (the not as hard as I thought deck).
Continued downside should bounce big or turn at 807 S&P, and 1107 NDX, the .618
level retracements. Beyond that the probability for a turn back up before heading lower
fades. However, I cannot identify any good pattern for a move to take out the lows from
here. If we get higher, I can, but not from here. I guess that is my weekend project.
TMD/DW
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