Elliott Wave Update ~ 8 May 2012

The market is impulsing down from the recent DJIA 13,338.66 high. It appears there are 5 waves in place forming wave (i) down. Today's bounce is best categorized as a wave (ii) bounce.  If this is a wave (ii) bounce  the retrace bounce would normally be in the range of 38% - 62%.  It is not yet in that range.

DJIA  squiggle count:

SPY showing the open gaps (3) as potential targets and backtest of the neckline of a head and shoulders pattern.  However the market has broken beneath the neckline which is bearish price action.

 Wilshire 30 minute.

Wilshire 60 minute. I will note that the last plunge in 2011 occurred very quickly with very little subwave retracing once it got rolling to the downside.  If the same occurs here, then we could be just looking at an obligatory backtest of a broken neckline.

I guess we'll know with the overnight futures how much risk is back on or off in the market and how Europe fairs overnight.