Elliott wave zigzag, motive wave, corrective wave, counting waves, Fibonacci extension, Fibonacci retracement, Fibonacci confluence are profiled in this report by TheMarketDetective.com

1. 1/21/200911:20 PM Pacific
The short-term count and ratios work best for 5 waves down, 3 waves up, and 3 waves
down. If these counts are correct, and given the retracement today following the recent 3
wave count from A-B shown below, then there is only one possible pattern we could be
in, and that is the C wave of an expanded flat correction following the 5 wave set down.
The projection for the same pattern in the NASDAQ e-minis is quite a large move as you
can see in the next chart. These are not the only options but they are based on a 3 wave
count down from last evening that abruptly reversed this morning and took out the
backstop high of the expected 4th wave and aborting a 5th wave option.
In the NASDAQ e-minis below you can also make out another option. If the last wave
down was 5 waves instead of 3 waves, and since the move down from A is a .618
extension of the 5 waves down from the high, then it could be a completed zigzag down.
This is the reason it was indicated as the first target on Monday evening.

2. 1/21/200911:20 PM Pacific
There are other options too. If the entire move down just completed the 5 wave set today,
then the retracement could look something like the next chart.

3. 1/21/200911:20 PM Pacific
The fib ratios for that last option don’t work out very well, but the cleanest ratios were
aborted today with the reversal, unless of course the expanded flat thesis prevails.
However, I find the targets projected for the C wave in that scenario a bit unrealistic for
one five wave set without some sort of catalyst.
So far all of the options that I have shown you support higher prices over the short-term.
There is one scenario indicated on the next chart of the NASDAQ e-minis that doesn’t
support higher prices. This scenario is negated if price moves above 2 as labeled on this
chart.
Given the strong reversal and a 3:1 scenario ratio supporting higher prices, there is a bias
for further upside. However, the fib ratios are poor for these options and the divergence
between e-minis of the S&P500 and NASDAQ100 make corroboration either way more
difficult. I am going to wait for the next clue.
TMD/DW
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