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Thursday, November 4, 2010

The Large Count

Like I said in my last post, the P2 count has been invalid for a few days. The Nasdaq 100 made new recovery highs a few weeks ago (but it is a fairly narrow index). The Nasdaq Composite did so yesterday and the Dow Industrials did so today. Based on this gap and move, I fully expect the SPX to set new recovery highs also before turning down. It is only a couple of points away.

So the relevant question is: what is the overall count?

It is not a completed P2 (obviously), and with a higher high I am doubting it is Primary 2 at all. The move is going on for too long. I talked about other options many months ago for awhile (the last update being in August: Where we are: The Long Count and some thoughts), and that would be a Cycle degree X wave.

First, I do not buy the count off the bottom in March 2009 as a five wave impulse: (see Another Impulse Wave Study: A Look at the 1974-1975 Low and Rally and Not All Five-Wave Moves Are Impulses: A Short Treatise on Elliott Wave). And I will not regurgitate all the macro reasons that go against a new bull market here. If you are interested, these thoughts are all recent and valid: The Big Picture: Technicals and Macro. In short, I think the secular direction is still down.

But with new recovery highs, the picture is not as bearish for the intermediate term. And I think it deserves an update:

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