DJIA Update_9_23_12

The strong upwards movement in the past few weeks has forced me to reconsider the wave count I am applying to this current wave structure, from the primary level down to the sub-minute wave count.

The entire basis of this personal academic exercise is based on the applying the Elliot Wave techniques as well as the socionomic analysis in an objective manner. Where things don't add up they have to be scrapped in light of a more appropriate count. While my last model suffered from at least one contradiction, in terms of the Elliot Wave guidelines and the wave count I was using (namely having to force the market fall of last august into an assumed "A" or primary bear market wave), this current count, though seemingly less than perfect visually before, corrects all of the previous contradictions within the system as far as I can tell.

The following diagrams represent the structure of my new count. All of my predictions and wave counts from here on out will be using this as a basis. SO, IF YOU ARE A NEW READER THIS IS A GREAT POST TO START WITH.

The light green price-line bar reading 1.618% is computed from the base of the market correction in 2009 to the completion of its first five-wave sequence, which is labeled as wave-A. This is followed by a three wave structure comprising wave-B. The new approach is considering the remainder of the markets growth as one large "C" wave which, at its peak, will complete either a cycle "B" wave or a cycle "D" wave. Both of these are listed in the graph below. 

In brief, the new count calls for a minor pullback, likely to around 12,500 during the month of October and possibly into early November. This should be followed by a final push up in the market to the point where wave "C" reaches the level of 1.618 times the leangth of wave A.

 In the alternate, which is not provided in the graphs, the dip we saw this past May would qualify as wave-4 (black) and this current wave-5 would terminate primary wave "C". I think this less likely the case because the structure of wave-3 (black) fits better with the assumption that wave-ii (purple) (from last October) and wave-iv (purple) from this May tend to allow this wave- v (purple) to tend more towards an equal amplitude with wave-i (purple).

The bottom three charts also have an overlay or sub graph of a technical study referred to as the Elliot Oscillator. Functioning as a moving average of the markets various amplitudes it demonstrates very well the relationships of the different waves in the structure to each other. Notice how third waves are consistently more robust than five waves. This tool has helped me confirm my newly assumed wave count. For a great explanation of this study please see the following site. (As usual, I take no responsibility for the content or quality of its information. This is all an academic / learning exercise on my part, and, as has been shown, is subject to flaws.). 

http://www.tradingfives.com/articles/elliott_oscillator.htm 

Best,

Warren

Associated Graph to Market Update from 9_7_12.

Although there is a likelihood that the Fed will announce quantitative easing tomorrow, my prediction that another bear market motive wave is imminent stands. I am placing the next most likely point of a serious drop around 9/20/12 and believe that a trend downward will likely precede any large drop.My new revised top is 13,389 in the DOW.

Best,

Warren

DJIA Market Update 9_7_12

What I had labeled as a new one wave down was in fact the wave four correction within the larger Upwards C wave pattern. My call for a critical fall is still on and this current upwards wave should not grow in amplitude beyond the spread of wave 3 ( labels on my previous chart as waves 3 through 5. I will post a new chart likely tomorrow evening to account for this mistake.

Best,

Warren