7/26/11

I have decided to show a different wavecount.  This wavecount is similar to Elliott Wave Applied's bullish count.  It does require Minute [iv] to overlap Minute [i] slightly, but the overlap is small and I find it acceptable.

The alternate, superbear count is that P[B] topped on July 7.  (I do not accept the May 2 count, even though May 2 is still the price high in the DJIA, SPX, and RUT, as the rise from the March low was clearly 3 waves). The alternate alternate superbear count is that P[B] was in fact May 2, and we are about to begin 3 of 3 of 3 of 3 of... of 3 of (1/3) of P[C] very, very far down.  And those are a lot of patterns that could be construed as bearish we've seen in the past couple of days... a potential double top, two potential heads-and-shoulders...

I like this count for several reasons, mostly because the wave [ii] and [iii] especially seem to look like a typical 2- and 3-wave.  The wave [ii] retraces a large amount of wave [i] (and wave (ii) of [iii] retraces a large percentage of wave (i) of [iii]), and it allows that weeklong advance to be a highly extended wave (iii) of [iii] rather than wave (iii) of [i].

The past few days have been characterized by a futures overnight selloff, rally into midday/early afternoon, then a selloff into the close.  This is perhaps more typical of wave 4 behavior than the wave 2 I have it labeled in both main counts, but I can't find a satisfying place to put the wave (i) and (iii) if that is in fact the case. 

As for the dollar, it is still annoyingly down and has breached its May low of 73.51.  The EURUSD went well above 1.4459 and past most other retracement levels.  This lends credence to the idea that the dollar is approaching - or made today - a major wave 2 low, possibly of Cycle degree as Daneric suggests.  Further evidence of this possibility is that virtually everyone, including many contrarians, is bearish the dollar - and the fundamentals for it are rather bad, which is normal for wave 2 of a bull market.  Is hyperinflation really about to happen when so many people are worried that it is about to happen?

The KRAP closed down 2.68 points today at 1631.87, led by a selloff in shoes.  Not even the power of the church of Appledom combined with a recovery in LULU (which had sold off yesterday) could prevent a down day.