Elliott Wave analysis on SPX

How to view the entire chart:


1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.


I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.


I Hope this helps,


Juan

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I have done a previous Elliott wave count on the S&P 500. To look at the longer term analysis I have done, visit this web site:
http://www.pathometrix.com/Frames.html

then click in the hypertext:
SPX 03/01/2006

Notice that my analysis suggests that the S&P500 is in a B wave series that started in Oct. 2003, as the Irak war started, and it is likely to approach 1400. The series is a double zigzag.

The double zigzag is a WXY series composed of 2 zigzags (waves W and Y) interrupted by a corrective (d3 in this case) series or wave X. Under this theory, wave Y is in progress since July 2004. My most recent analysis of the "Y" wave is shown below:


Note that wave "y" is incomplete, but it may be reaching the end. In fact, the sentiment appears to have changed in the past week. Using conventional technical analysis we notice a break down of the S&P500 decisively below the 50dMA, from which it has bounce in the past 2 occassions. Notice also that the stochastics is travelling down with no evidence of a reversal, yet there is a clear indication that the price may break below the Bollinger Band. The bearish trend may continue for the next weak or two, as suggested by this chart.





The weekly chart shows also an apparent divergens in the stochastics oscillator with a sell signal starting to form



The main question for the Elliottician is: Has wave y concluded? If wave Y has truly concluded, then the historical wave B could have concluded too, and we would be entering a bear marker to match the 1999-2003 bear market (wave A). This new bear market would be wave C, necessary for the begining of a powerfull bull market.

However, my detailed study of wave y suggests that it is still in progress and that a rally 1400 is still to come. The chart below shows that a double zigzag (wxy) is in progress, but it is a complex wave x that is in progress. Thus, we are still likely to hit the long term target of 1400.


I think that there is a divergence between the Elliott wave analysis and the conventional technical analysis. The T.A. appears eminently bearish. The Elliott wave analysis suggests that there is a final rally still to come.

Today, more than ever, the PCCRC seems the only reasonable way to trade. Should there be a rally, our trades may benefit from the upside, but if suddenly we begin to see a strong decline in high volatility, we be benefit also to the downside.

On Friday, IMCL triggered my system, jumping to a new 52 week high. I believe that this is a good candidate for a PCCRC because the Elliott wave analysis is wuite bullish both in the long term:



and the short term analysis.


Under any other circumstance, a long call or a bull call spread would have been a good bet here. However, considering the obscure future for the S&P500, the best approach is to examine the volatility on IMCL and see what we get...

Please, everyone, could anyone make their interpretation of the IMCL opportunity from a I.V. point of view and comment? I will complete this blog on monday.