Elliott Wave Update ~ 11 October 2012

Using the Wilshire5000 for superior wave form, there is definitely impulsing patterns to the downside going on. However another strong push to complete a more robust wave (ii) would not surprise me. However, as EWI likes to say: its not required.

Its a moot point as we'll likely know how overnight futures plays out on whether a Friday strong bounce will come.

SPX 30 minute. If wave (ii) has another push, the likely target zone is 1447  - 1452 SPX.

However note how the recent surge to the 1470 "test" occurred on what can be argued is an ending expanding diagonal triangle. Not only an ED pattern (which is weak price action) it may have truncated (weaker still).

Add up the following wave evidence and you have: 1) possible small ending expanding diagonal triangle with 2) possible truncation and 3) possible 2 year rising bearish converging wedge which is showing signs of not being able to break above its upper wedgeline and you have the potential recipe for a market collapse disaster.

Yes that pesky 2 year rising wedge has not gone away. More importantly is has not been nullified. This BPSPX chart shows each leg of the wedge has less and less push and loss of momentum.

Wilshire hourly chart again shows the up channel (green) is in peril.