Are all three of these presuming a bull market?
Gersh, for my short term trading purposes, it doesn't matter whether its a bullish or bearish scenario. I'm just looking at a very small piece of the puzzle that extends only a few days into the future. As you know, waves are categorized by degrees, with each degree being composed of waves of a smaller degree, which themselves are composed of waves of even smaller degree, and so on. I'm looking at waves on 5-minute and 60-minute charts.
What if 7/17 was the top of a ABC correction wave 2 of 5 down from the all time high? Would that work?
Yes, that would work. In fact, July 17, could have been the end of corrective wave 2 (composed of waves ABC). We may now be in wave 3 and on our way down to the bottom of wave A, which would take out the May lows. Here's something that I cut and pasted from a prior message that outlines this bearish scenario.
Some Elliott Wave practitioners believe that the market has much more downside. Under Elliott Wave principles the market advances in five waves (Waves 1, 2, 3, 4, & 5) and corrects or moves down in three waves (Waves A, B & C). Here's a chart that illustrates these principles:
home.swbell.net
Now, look at the right half of this chart -- the Corrective side. Notice that there is a large downward [A], [B], [C] corrective wave. After the market peaked, we entered this corrective wave. Here's where the real difference of opinion surfaces. Some people feel that the market has already traced out the entire [A], [B], [C] correction and that the bull market is back (upward movement in impulse mode or 1, 2, 3, 4, 5 waves). Others do not share this opinion.
Robert Prechter (http://www.elliottwave.com/index.htm ) has a different, more bearish view. I believe Prechter is saying that the market is in corrective mode and that it is now approaching the top of wave (2) on its way down to wave [A]. In Prechter's view, the market has much more downside. In fact, Prechter is calling for a major stock market low in 2003-2004. |
