Monday, September 20, 2010

Elliott Wave Update

I was expecting a rally to the upper trendline of the broadening top but I wasn't expecting this strong of an upside. I will have to revise the count but from the look of things we had another 3W of a Minute wave. The wave count is actually exhausted at this point as we've seen multiple 3Ws in 2 weeks time and Elliott Wave has become less reliable of a predictor. In addition, pretty much all Technicals are overbought so as a trader, I can't do much other than set my stops accordingly. I went short on margin today at 1134 and I have my stops for all short positions at 1150. There is resistance at the 1146-1148 level so we'll if we can get a pullback this week. I think once we get a pullback (perhaps to the E point of the Ascending Wedge?), we'll see a big rally for the rest of the year to new highs.

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