DJIA - update. Correction of the correction.

              I call "correction of the correction" all that rally since 6th of  March 2009 till now.
And now I have a few reasons to expect downside move, which is correction of the upper  "correction of the correction".
                                                 I think became too complicated.

1. First one is a huge divergence to many indicators and price movement on daily base MACD,RSI, etc. 
2. All that straight rally hasn't got it's big enough correction  ( 06/11/2009-07/08/209)
3.  The bulls advanced to 52.2% from 48.4% a week ago. That is the most long-term optimism we’ve seen since December 2007, when their number was retreating from 62.0% shown at that October’s all-time market high. A year later at the first bear market lows the bulls had slipped to just 22.2%.         Advisors Sentiment Table
   

   Date	DJIA	S&P 500	Bullish Advisors %	Bearish Advisors %	Correction Advisors %
   Tue Dec 15, 2009	10,501.05	1,114.11	52.20	16.70	31.10
   Tue Dec 8, 2009	10,285.97	1,091.94	48.40	16.50	35.10

                 
   
4. We are very close to end of  Fibonacci 3th cycle on the chart (orange dotted vertical line)  
5. I think we have 5 impulsive waves down.

                                                                       To many reasons.

Market preview

        

         Santa Rally might over, but the Grand Rally (since 6th of March 2009) might not yet .

        

         What do we need when the current picture is not impulsive and we are involved in counting waves and waves and waves,but corrective (till now) and unclear?

         We are looking for other instruments for help.

        

          As Elliott Wave Principle  followers, sometime we forget  the basic, and very well proved Charles Dow's theory. The Dow theory has been around for almost 100 years, yet even in today's volatile market, the basic components and patterns are still remain valid. The Dow theory, like the E.W. Theory  addresses not only technical analysis and price action, but also market philosophy.

      

        While I was previewing  few charts in daily base yesterday, a small lamp blinked over my head...(again)

I saw  it  in early August, but didn't pay it much attention.

         I've enclosed few charts; Just take a look at the first one - the main one.

      

 Isn't that the first one classical pattern we've learn about: Of course- HEAD AND SHOWLDERS.

As most of you know that's the formation, which has very high probability- about 90%,as much as in EWT.     

                                                                          One more chart:

 One more:

One more:

And one more:

 How do you think :

Don't they look like a big twin family?

DJIA - Santa Rally might over.

                It's majesty-the market make us all dump heads almost all the time.Now I feel like that, trying to predict next Dow move. My both charts review two different directions. I know that you have seen that movie (the price will go up or down), but the current tape is very unclear (for me).

                        That's why I released two counts.

               Firs one shows completed (5) wave, which is truncated after completed "expanded triangle", and marks the end of (Y) of double zig-zag.

The first leg down is underway and (V) of 1 is still incomplete. If the price breaks 10 235 key low will confirm that count.

            

               Second one shows (I) up after completed "expanded triangle  and very deep pull back as wave (II) as "zig-zag".

If the price breaks 10 235 low will eliminate this count.

I bet on the first chart.

Good luck !!!

DJIA - update

DXY - USD Index - update

I think US Dollar's downtrend is already done for now.According to my EW count we have five clear waves downside  completed, which completes the A,B,C pattern - called "expanded flat".At the bottom the bulls were over 90 %. In my post - Nov 25th  i pointed  reversal area- about 74,17, and I was very close, it stuck at 74,23 and bounced up to make it's first wave up.A small correction is expected next few days, reaching 75,49 area, where is 50% Fibo retracement,  and then up again.

Good luck!