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Feb 27th, 2010: Symmetric Triangle Wave [4]?

Posted by pugsma on February 27, 2010

2-28-10 (11:30am):  In electrical engineering when an under-damped control system receives an impulse input, the result will be an over-shoot of the control set-point followed quickly by a reversal and then an under-shoot.  If you look at the 1090 area as the value the SP-500 wants to maintain, you can look at the end of 2009 year 60 point run-up as an overshoot, followed quickly by 105 drop resulting in a 45 point under-shoot.  Now the market has restablized around 1090 again.  It’s reasonable to expect the market to consolidate arond this 1090 level again for a few weeks before making it’s next directional move.  There should be smaller and smaller price swings as it settles.   This is exactally what a contracting sysmmetric triangle does for the stock market.  It allows an impusle into the market to settle out with time.

Here is the proposed Wave [4] triangle again showing the Nov-Dec 2009 consolidation around 1090 as the level prior to the impuse and now the settleing taking place.

60-min SP-500 Triangle Wave [4] (2-28-10):

12:45pm:  How about a large symmetric triangle for Wave [4]?  It should be made up entirely of 3’s, or A-B-C-D-E, which is 3-3-3-3-3.  After discussing it with one of my followers (Indigo), I may have rushed the count a bit for the wave [4] triangle that I posted on Friday.  Let’s take another look with the count slowed down in time.  It looks like this coming week could see a peak around 1115.  And we know that OPEX (March 19th) has Max Pain at 1040 and Current Pain at 1060.  So, let’s say we peak at 1115 for the B-leg.  Then drop towards 1060/70 for the C-leg, which would time out around OPEX week.  Then one more push up to 1100 for the D-leg in late March.  And then the E leg stops just below the 1090 pivot at about 1085.  The triagle wave [4] measures 120 points, so if you add the 120 points to the pivot at 1090 you get a target of 1210 for the completion of wave [5] of P1 sometime in May or early June 2010.

One nice thing about a Wave [4]-P1 triangle count is that it would alternate with the Wave [2]-P1 simple Zig-Zag or A-B-C, thus satisifying a key Elliott Wave guideline.

60-min SP-500 Chart with Wave [4] Triangle:

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