Elliott Wave TRIGGERS and TARGETS

[RCKS]

Pretzel:

http://www.pretzelcharts.com/

"I'm going to use an analogy I've used before, because I believe the current market fits: The market is like a rubber band stretched to its breaking point -- either it will snap back and begin a strong rally over the next few sessions (quite possibly as soon as today's session) or it could break.

As we look at the options, it's important to remember that QE-Infinity hasn't actually started yet. Some bears are calling QE-Infinity a "failure," and even the mainstream media (who should know better) has been guilty of this. The effects of the QE MBS (Mortgage-Backed Securities) purchases won't be seen until the Fed cash actually makes its way into the Primary Dealer accounts -- there was no liquidity flood released when the media announcement happened. And no liquidity added even once the first purchases were made, as MBS settlements are done on a forward basis. The first MBS purchases aren't scheduled to settle until November 14, so that's roughly when we'll finally begin seeing the "real" effects of QE-Infinity, which is anticipated to be inflationary (i.e.- rising equities and commodities prices).

The old adage of "don't fight the Fed" sticks in my mind going forward.

Yesterday's preferred short-term count played perfectly, as the market rallied up to my wave 4 label and reversed immediately to a new low. So, the short-term count was correct -- but what about the intermediate-term counts?


The predictive power behind Elliott Wave analysis is underpinned by two key strategies:

1. Using the available price action to attempt to anticipate the pattern that will unfold going forward.
2. Understanding the key levels where that anticipated pattern becomes invalidated and mutates into something else.

This is why I usually give both a preferred and alternate count. The preferred count is "here's what looks most likely, given the price pattern that's currently visible"; the alternate count is the "okay, that fell apart, so this might be unfolding instead.""