Brief update of the long-term Elliott Wave count

Since next Friday I am heading to the beach for at least 4 weeks this is probably my last update until mid August.

As I have discussed in my last update on June 8 on the subject of the long-term Elliott Wave count (From the March 2009 low) I am considering that price is unfolding a Triple Zig Zag.

If this scenario is correct from the October 2013 low price should unfold a Zig Zag (ABZ) with a theoretical 1.618 extension target located at 2066.

We have the same issue I discussed regarding the up leg from the October 2013 low to the January high, which is clearly corrective. Once again the up leg from the February 7 low is also corrective therefore since the last wave (Z) must be impulsive the absence of impulsiveness should result in an Ending Diagonal.

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Even though the internal structure of the advance from the July 2012 low has unfolded a complex corrective Elliott Wave pattern (Double or Triple Zig Zag), in a weekly chart we can make the case that price has unfolded a 3-wave up leg.

A corrective advance is by definition a countertrend move. Probably it is not over yet but maybe the wave (A) of a larger Zig Zag could be in place. If this is the case a multi-month wave (B) pullback should retrace a section of the wave (A) with a potential target in the range 9232 – 8756

In the weekly chart we can see that from the December low price has formed a rising wedge. Usually if the wedge pans out it sould be followed by a sharp decline that can retrace back to its origin which is located at the December low.

The support that must hold in order to prevent the bearish aftermath of the potential wedge is located at 10705.10

If the rising 20 wma which today stands at 10464 is breached it will confirm the trend reversal.

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Reason: XLF is displaying a potential Double Top

From the April 11 low XLF, as well as the majority of US Indices & Sectors, has unfolded a corrective Elliott Wave pattern, which can be counted as a Double Zig Zag.

Even though SPX and NDX probably have not concluded yet their corrective patterns (Though the top should be close to current levels) XLF is displaying a potential Double Top with negative divergence of the daily RSI

If the Double Top is confirmed, in which case the current bounce MUST establish a lower high, the target is located at 21.95

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Author: Ryan Detrick