Saturday, December 5, 2009

S&P 500 Weekly Elliot Wave Count

As Elliot Suggested, Markets move in a series of 5 waves in one direction, with a 3 wave correction in the opposite direction of the trend. There are different degrees of trends, from Grand Supercycle waves lasting many decades, to Subminuette waves lasting only minutes. That is what makes Elliot Wave Theory so great: It applies to any time frame you are looking at. When the Stock Market bottomed in March 2009, 5 Intermediate waves down could clearly be counted. The question now is whether this Bear Market will unfold as 5 Primary Waves down, or only Three. Waves of a Primary Degree are used to count major impulsive and corrective trends in a cyclical bear market. If this should unfold in only 3 waves, this move up since March would be Primary Wave B up, with a Primary Wave C down to come. If this should unfold as 5 waves down, this would be Wave 2 up, with Wave 3 to come. We would then get another Primary Degree bear market rally in a primary wave 4, with one final primary wave 5 to end the secular bear market. Regardless of which count is correct, new lows should be upon the stock market before it reaches its Secular Bear market bottom, which should make for the best buying opportunity of a lifetime.

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