That is my preferred explanation here. I would have thought we'd see capitulation and a lasting bottom given the events, but it is fairly clear to me that we saw no real bottoming action. Those lows have the distinct feel of a headfake. While I haven't tried to make a count on the teeny timeframes, my feel is that it was a "b" bottom, and the down that preceded it from May-August was indeed "a".
However, when you zoom out, it sure looks like we might be in a running flat for the big 4, which now has a=c. When reviewing behavior on this scale, I try not to get caught up in internal counts. I know it violates Elliot theory, but it's a tenet of mine that, when you've zoomed out far enough that the resolution of the fractals is lost, their internal counts are no longer important. SOX has hit my loony-target for this move, so I'm allowing it to be done here. However, an ending diagonal for "c" would be a distinct possibility, meaning one more minor new high.
It is an excellent lesson in the perverse way of markets that, despite the clear deterioration in the economy, the market price level is probably HIGHER now thanks to 9/11 than it would have otherwise been due to the panic moves by the Fed.
BC |
