8/17/11 - I Still Hate Fourth Waves

I have no idea what the market is doing right now.  It made a new high, I got back into SDS near the day's low which was a bad move on my part.  No doubt wave [iv] is doing one of those convoluted WXYXZ type of corrections that I don't have any hope of figuring out until there is SOME confirmation that wave [iv] is actually done, which there isn't yet.

Thus, the below chart is skimpy on Elliott wave labels but bulky on trendlines:

Notice the thick burgundy line running from the bottom.  That line is the channel line running through the Minute [iii] low and the interim low of 1118.01.  This line intersects the trend line from the two intraday lows on August 12 at the exact time and price of today's 1184.36 low.  It is reasonable to surmise that if we are in a WXYXZ correction, the 1118.01 was the first X (Minuette (x)) and today's 1184.36 low was the second X (Minuette (xx)).  In which case Z up is due and shorting, as I did, is probably not the best of plans, at least not yet.

Or is it?  Because the slope of every line connecting each set of two new highs starting from the 1125.34 low (which is Submin a of (x) if the WXYXZ count is right) has been becoming less steep as time goes on, shortening the wedge.  A flat line from today's top intersects the burgundy Friday morning at around 11:30; extrapolating the most recent "new high to new high" line to the intersection of the burgundy yields Friday afternoon at 3:30 at a price between 1215-1220 (naww, they wouldn't, would they?).

The light blue trendline represents a more bullish view; it intersects the burgundy sometime Wednesday at around the upper 1240s.  Even here, this does not invalidate the wave as Minute [iv].

The point is that time appears to be running out for the uptrend unless it can break hard above the blue line.  And the clock runs out on opex day itself.  Enough time has passed since the bottom now that any top followed by a major break down is likely to represent the top of Minute [iv] rather than merely Minuette (a/w) of Minute [iv].

And for fun,

KRAP closed down today at 1492.80, but is still well above the June 13 interim low my pet index made before it skyrocketed like the numbers on a thermometer do this time of year (with apologies to my Southern Hemisphere readers, for whom it's the opposite time of year).  Still, you can clearly see the 5 down 3 up it made from its August 1 all-time high.  Also, if you count the waves in the rise from June 13 to August 1, there are 21 of them.