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I have to be honest that I am
grappling with a few possible counts since the March 2009 Bull market
commenced in terms of the big picture.
With Elliott Wave Analysis, you have
to anticipate, monitor, and then adjust. Most of the time I go with my
instinct and then only adjust if it looks like I was way off the tracks.
The only time I tend to get way off the tracks is when I read too many
opinions, so I’ve shut myself off from reading other’s opinions
and below is my gut right now:
I know I have labeled one option as
the 1074 lows being primary wave 2, with primary wave 3 underway since (1074
to current). However, I have to admit my instincts still tell me that
the 1074 lows may have been primary wave 4, and we are in primary wave 5 up
now.
Whether it was 2 or 4 is not super
important short term because we would either be in a Primary 3 up or Primary
5 up now which is bullish either way. However… if it’s a
primary 5 up, then it changes the longer term pictures and also 5th waves can
be difficult to assess.
There is another rule that says wave 3
can’t be the shortest of waves 1, 3 and 5 (All up waves).
Therefore, if we are in primary 5 up now from the 1074 lows then we
can’t rally more than 360 points from the 1074 lows (Wave 3 was 360
points).
So here is the possible count if this
is Primary 5 from the March 2009 lows with normal fibonacci
relationships:
666 to 1221- 1
1221-1010- 2 (38% of 1)
1010-1370- 3 (61.8% of 1)
1370-1074- 4 (38% of 1-3)
1074-??? – 5 (Normally 50-61% of
1-3)
So if wave 5 cant
be longer than wave 3, and let’s say wave 5 is 50% of waves
1-3… that would put a top target at about 1426 on the
SP 500 index. That would make
wave 5 just shorter than wave 3 following the rules and would complete 5 full
waves.
So that is what I’m grappling
with because if this is a primary wave 5 up from the Oct 2011 lows of Primary
4… then we would need to be on our toes for a bull market pivot top.
If its primary wave 3 up , then we have much
further to stretch.
Right now, the evidence is leaning to
this being primary 5 up… below is my chart and I will keep you updated.
The volume, MACD, and other indicators will help point the way.
Note how the volume has been declining
on every primary wave rally 1, 3, and 5 so far. Note how the MACD line
uptrends on each primary wave rally as it is now…
Stay tuned
 
David Banister
The Market Trend Forecast
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