Tuesday, October 27, 2009

10/27: SPX, SPY, DOW, TRANS

SPX Count


SPY Count


Dow Count


Dow Line


TRANS


Wow. Where to begin tonight. There is so much going on and the major indices have just enough discrepancies in their wave structures to render the count quite confusing.

Let's start off with

SPX:

By my count, wave (iii) blue is in progress. We ended the day with a possible wave iv (red) triangle. If the count is correct, a thrust down to complete wave v (red) should occur in the am to complete wave (iii) blue.

Whether wave v (red) fills the gap below 1060 or truncates at this support level will have to be seen. I'm still keeping an eye on that purple trendline. That is my near term target if and when 1060 is taken out.

The Alternate count (in blue) is still in play but will be invalidated if price breaks through 1060.

Though I did not label the chart, I do believe there is still a series of 1-2s occurring as well. Colombia1 does a fine job labeling this (http://ewtrendsandcharts.blogspot.com/)

SPY:
Not much to add here by way of counts but just wanted to point out the two breaks in the trendlines and the ever increasing MACD histograms.

Target is still 104.

Dow:

The Dow's count is similar to SPX's, however, with the bar chart, there is a clear 4-1 overlap. This is a no no by EWP rules.

The wave iv (red) appears to be forming a triangle, however, that just may not be one after all. This could either support the 1-2 1-2 count or this may just be one of those times where the rules may be violated or the count is wrong completely.

FWIW, I included the line chart, which as I have repeated in the past, sometimes helps provide some clarity. Notice with this chart, there is no 4-1 violation and the triangle pattern is quite clear?

We will know soon enough tomorrow.

TRANS:

Last but not least I think the Trannies is showing the most precarious situation.

Price has broken through the 50 SMA, broken through two trendlines and a MACD centerline cross is very imminent. I believe the case for a double top is growing each day.

There are too many squiggle counts at the moment, but I think the trannies may also be sporting a series of 1-2s as well. I may get around to drilling the count down tomorrow. For now, I have just labeled this decline a minute [i], which I believe has more to go.

Once again, all this appears to be indicating a possible near and intermediate term top.

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