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Special Elliott Wave S&P500 Bulletin   

For May 1, 2009

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Anant is away again today so I am providing the chart and overview. 

The S&P500 Index, as well as a number of the other major indexes, continues its corrective climb which has caused the count to evolve as more corrective extensions develop. Here is a slightly different take showing a larger Zigzag (ZZ) from the March 6 low as opposed to the Double Zigzag (DZ) we presented yesterday. The Ending Diagonal (ED), currently in the process of forming Wave 4 down, will then produce Wave 5 after which the decline should occur, probably not till next week.

So could this pattern evolve into an Impulse? That would not be possible according to Elliott Wave rules given the Expanding Triangle (ET) that occurred between March 23 and 30. An Impulse pattern can never have a triangle as Wave 2. (Interesting how many EDs we've had in the last month isn't it?) This is clearly a corrective pattern  counter to the primary down trend.

Figure 1 –Zigzag (ZZ) originating March 6 with the series of corrective wave patterns with the bearish Ending Diagonal (ED) from March 30. Chart provided courtesy of Refined Elliott Trader (RET) software produced by Elliottician.com Data by eSignal.com

Suggested Elliott Wave Reading

Forecast Change for Elliott Wave Followers by Matt Blackman (SFO article explores recent EW research findings)

http://sfomag.com/article.aspx?ID=1218

Short Overview of Elliott Wave Principle

http://www.indiacharts.com/EW.htm  

Elite Trader’s Secrets by Richard Swannell (Free eBook)

ftp://ftp.elliottician.com/pub/ebooks/ERP1Results2003.pdf

Elliott Wave Principle by A.J. Frost and Robert Prechter

http://www.elliottwave.com/books/ewp/default.aspx?code=oco 

R.N. Elliott's Masterworks edited by Robert Prechter

http://www.elliottwave.com/books/rn_masterworks/default.aspx?code=oco

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