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Stock Market 2009 Elliott Wave Count Analysis

Stock-Markets / Elliott Wave Theory Jan 22, 2009 - 06:44 AM GMT

By: David_Petch

Stock-Markets Best Financial Markets Analysis ArticleThe short-term Elliott Wave count of the S&P 500 Index is shown below, with the preferred count shown in colour and the alternate count shown in grey. For the preferred count to be correct, wave [b] of a triangle MUST be forming at present, and follow through to wave [e] for completion to form wave XX before starting wave Z…this pattern represents a triple combination that would allow the broad stock markets to rise into mid March/early April 2009.


The alternate count I mentioned on Friday was that a diametric triangle was forming, with wave G likely to go above the wave [e] of 940ish. The alternate count would last all of this coming week and into the next before falling off a cliff. Either pattern has an equal probability of forming, as suggested by all of the Fib and price measurements performed (most not shown). If the preferred count is correct, price action of the S&P should remain between 815 and 870 while market action rising above 875 suggests the alternate count is correct. Those long the S&P watch for resistance around 860-870, which would indicate a decline in wave [c] of a non-limiting triangle in wave XX.

Figure 1

The mid-term Elliott Wave count of the S&P 500 Index is shown below, with the preferred count shown in colour and the alternate count shown in grey. As per the preferred count, there would be grinding stock market action to somewhere between 980-1000 before topping out around mid March/early April 2009. Whichever pattern forms as defined in the text accompanying Figure 1, wave (Y) of Intermediate Degree has yet to form, which will represent the final low for the present move down somewhere between 450-550…I put quite a spread in because the precise low will depend upon how bad things truly get. This sort of decline in the broad stock market indices will also create a drag with the gold stocks.

Figure 2

The long-term Elliott Wave count of the S&P 500 Index is shown below, with the preferred and alternate counts denoted in colour and grey, respectively. Given the time wave b took to form and the chances wave c passes well beneath the 2002 lows, a possibility arises whereby wave d.(IV) rises for 12-18 months to somewhere between 800-900 (this will represent a near double of the wave c lows), followed by a decline in wave e which will end as a “higher low” to complete wave (IV) sometime between 2012-2014. Gold stocks are going to remain in a trading environment throughout this period until gold puts in a spike low.

Figure 3

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

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Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

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