The Awkward Market

So far it's not looking like much of an impulse higher on the S&P, but I'm wondering if the entire move from the 1426.68 high is tracing out a correction.  Both sides, up and down, seem a little awkward looking.  Maybe they're part of the same move.

If this were true, there would most likely be lower prices to come before the market gathered itself and thrust higher to 1430-1440.

Or, it somehow gets to 1420 and collapses.  But the longer it marks time back and forth, the more the pressure builds -- volume or no volume.

So many pundits are saying that Bernanke won't deliver anything at Jackson Hole that, surprise surprise, he just may.  All this adds up to more reasons why I still feel it's better to play day by day for a little longer.

To me, awkward markets are corrective markets.  A market that has made up its mind goes somewhere quickly and without hesitation.

Speaking of awkward, I just witnessed a veteran Elliott wave analyst disregard the most important Elliott rule of an impulse wave just so the analyst could cling to his particular wave count.

His position is that the S&P made a wave 2 high a week ago Tuesday.  Even though it got above the April 1422.38 high intraday the closing price was below it.

One of the most important rules in Elliott wave theory is that wave 2 of an impulse can NEVER extend beyond the start of wave 1.  Yes, Elliott himself used hourly close charts, but any violation of wave 1 seems such a flagrant disregard of one of his central tenets, just to force the wave count into a bearish configuration, that it's an embarrassment to the method.

In this case, the impulse (wave 1 down) is being counted from the April highs down to the 1266.74 low of June, and the wave 2 is the supposed correction.  I too was looking for a wave 2 top, but looking for it in the 1380-1400 zone.  When that didn't pan out, I considered other scenarios.

I do not want to be part of a bearish cult-like obsession.  Yes, overall I'm rather bearish. But I have no qualms about being long when I have to be.

The good thing here is that if this analyst is correct, we should know quickly because we're talking about a possible wave 3 of 3 down.  If he is not correct, he should be fired.

Non-objective analysis is worthless and destructive.