Monday, August 31, 2009

Minor B Expanded Flat and H&S?


What do you think? Is this playing out to be an expanded flat for Minor B?

There are some problems with this count, most notably wave [b] of B. It is almost 1.618 x [a] of B. EWP guidelines suggest that wave Bs in expanded flats are usually 138% at most of wave As.

I'm sure if we dig down into the squiggles, some waves may not count properly. However, from a 60 min chart view, it seems plausible.

It would be interesting if this count does play out for Minor B before Minor C launches higher in to complete P2. That would form the right shoulder for the H&S structure that I believe may be forming.

All this may make sense. Selling and buying pressure both seem to be struggling. A flat scenario would make sense so as to match the "consolidation" phase of this run up before it's final spurt up (maybe not higher than 1039)to complete a truncated fifth bringing with that a termination of P2.

Let's see what happens!

Sunday, August 30, 2009

ESU09- Sunday 8/30; 8PM PST


I like Dan's Ending Diagonal scenario at this point for the final push to complete P2.

Dan's post tonight was a little early since I believe he is on EST. Since Dan's post, the E-mini has pulled back a little more. However, not enough to rule out the ED just quite yet.

Minuette (ii) of Minute [v] for Minor Y was still completing. I have wave c of Minuette (ii) of Minute [v] for Minor Y in progress on this chart. So long as it does not break below the blue dotted line, the ED (contracting) scenario will remain intact.

If it breaks below, one may argue that P3 is in progress. If not what else may it be?

I propose that it may be wave C of a possible Expanded Flat for Minor B.

If [c] = [a] = 999 (Running Flat)

or

[c] = 1.618 x [a] = 975

How probable is this count? I'm not quite sure but this is one count I see as a possible explanation if price breaks below 1022.5 (ES) or 1016.20 (SPX) and if it is not P3.

See chart below.



And of course as I complete this post, ES is starting to slowly climb its way back. It turned at 1021.25, which is right on the money with wave c = .618 x a of Minuette (ii) of Minuete [v].

See below.



So we will have to see how it plays out through the night. So far, Dan's count is looking the best. But like I've mentioned in the past, I like to look for other counts that are outside the box.

GL!

Friday, August 28, 2009

SPX 8-28 AM UPDATE



OneChiOnly came up with some good alternate count.

I added two labels for an alternate count in blue. Where I have minuette (iii) I have as an alternate as minuette (i). Minuette (iv) as minuette (ii). I have also labeled the alternate count in purple.

The reason is the correction from 1039.47 so far looks like a zigzag, which is indicative of a wave 2.

The other alternate count is that P3 has begun. A break of 1016 will strongly indicate that P3 is in play.

SPX 8-27 PM Update


Nothing much to add tonight other than the count for what appears to be Minute [v] of Y. The count appears to be a straight up 5 count.

I highlighted a range which I believe where Minute [v] will end. Don't forget that price will be attracted to the previous fourth wave extreme.

There are trend channels as well that may help. Please refer to my previous post on this.

We will see.

Thursday, August 27, 2009

SPX 8-27 AM Update


8-27 AM UPDATE

------------------

8-26 PM FORECAST
-------------------
So far so good huh? Let's see what happens here in the next few hours.

This may now open the gate for a few other alternate counts I have previously mentioned. We will have to see what happens first.

For now, this will be my primary count and Minute [iv] is technically whole. Do we start Minute [v] here in the next 15 mins? It's possible or we continue lower in which case I will keep counting.

GL!

Wednesday, August 26, 2009

SPX 8-26 PM Update



I'm not thoroughly convinced of this count but thought it would be worthwhile to put out there as an against the grain count. The consensus of EW Bloggers I follow have a corrective combo for Minute [iv] ending tomorrow (not to break 1021) prior to a Minute [v] thrust higher.

Somehow, I felt I should put this count out there as well since the corrective waves from the Minute [iii] top is quite confusing and has been a challenge to count. This count implies that Minute [iv] has more to go and that would be down to complete wave y (red).

The triangle subwaves of X may still have some room to develop. Once complete, I will be watching to see if it breaks lower.

Earlier in the day, I posted on Dan's blog that overall this pattern looks like a bullish pennant forming since the 8/17 low. However, upon closer examination, this pennant may be forming off wave w.

We will see what happens tomorrow!

SPX 8-28 Update


This is a possible alternate count that may be in play.

SPX- MINOR B EXPANDED FLAT



UPDATE 8-26

A mistake has been pointed out to me with the labels on this count. Since I re-use the charts and move labels around, I completely forgot to remove the Minuette waves labeled (i)-(v). This should be labeled as an a-b-c, which I believe I can do. I won't change this chart now until I see more confirming action in the market.

Let's just say right now there may be a Leading Diagonal forming off the 1037 high(this is assuming I change my count and make that high the top for [v]) from yesterday.
--------------------------
This would be considered an alternate count that I would have for the current structure. MINOR B is not complete and we are working on an expanded flat.

One problem with this count is that Minute [B] is 1.50 x [A]. Per EWP guidelines, Minute [B] is typically no more than 1.38 x [A]. So it is not by much and it is more a guideline vs a rule so this may still hold as a potential alternate.

Tuesday, August 25, 2009

SPX Count 8-25


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A Closer Look At Subminuette iii and iv.
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UPDATE: I have included this chart of E-mini. It is showing a very similar count.
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Ok, so who am I to come up with a different count from the more experienced guys? I'm going to go out on a limb here and present a count I think may work.

So far everything looks pretty good to me. Most of my comments are on the charts. I know it is very busy. When I first started posting charts on this blog, my goal was to make the charts as clean and simple as possible. I know how confusing the labels can get and it just makes it hard to digest.

Unfortunately, this chart is filled with markings/labels because I need to explain what I am seeing.

I hope it makes sense. Please feel free to comment obviously and I'll be happy to answer any questions you may have.

The bottom line is I have Minute wave [iv] in progress and I believe it will play out as a flat. It appears that wave c of Minute [iv] may be in the process of developing a 1-2, 1-2 wave structure.

My target for Minute [iv] has not changed. I have been calling for it to fill in the 1018-1016 gap now for a few days.

This chart/analysis, I hope, will shed some light. A Fibonacci confluence indicates that this may be possible.

Once Minute [iv] is complete, I would expect a Minute wave [v], which would be up. Nothing has changed with regards to where I think Minute [v] will head. Take a look at my previous posts on channeling for a clue.

I have also included a 1 minute chart, which I hope highlights the fact that Subminuette iii and iv (in red) are legitimate. It is clear that SubMinette iv is subdivided into a Micro a-b-c.

So we will see what happens tomorrow.

Note: I have noticed that blogger has been publishing my charts a lot smaller than it should on Firefox. I'm not seeing this with IE. If you are having a problem reading the chart, just zoom in on the image.

You can do this by pressing Ctrl and '+' simultaneously.

SPX 8-25 PM Update



Well, looks like wave [iv] was a little stubborn today. She was looking primarily like a flat, however as the day progressed, she was also looking to form a triangle. So with that, there are three things I'm looking at right now in order.

1. Flat still in play with wave c of [iv] in progress. Target area somewhere between 1022-1018.

2. Wave [iv] flat completed at 1026.21 low. Wave [v] in progress. Target area still in the 1044 area.

3. A Wave [iv] triangle (contracting type) is in the works. You can use the same sub-wave labels I have in red for my flat for the triangle. Wave c is either still in progress or complete. If sub-wave c (red) breaks below 1026, then the triangle count is out of play and option #1 is more likely.

If price tomorrow breaks above 1037.75, then the triangle (contracting type) also out of play and his would indicate a greater likelihood that wave [v] is in progress.

SPX 8-25 AM Update


---------------------------
-UPDATE (7:30A PST): What I do have to add is wave [v] could have completed at today's top of 1037.75. if yesterday's 1022.48 low was the end of wave [iv] and today's new high of 1037.75 completes wave [v], we could be pushing lower.

Could that be the top of P2 or the larger flat for Minor B. I will post a chart later if it looks like a potential flat for Minor B.

---------------------------
Looks like our wave [iv] took a little detour but not to fret. It appears to be developing a flat. If this is correct, a legitimate flat will carry price down to at least where wave a (red) began and just a little lower.

If wave c (red) becomes 1.618 x wave a (red), then it should target the 1018 gap below. Of course a Running Flat would cause wave c (red) to fall short of 1022.

I have added today's action and projection in red.

By today's action so far, it looks like we will go higher once the wave [iv] flat completes.


Click on the link for a definition of a Running Flat.

Monday, August 24, 2009

P2 Top?



Let's revisit the above chart. Remember all the trend lines converging would make for a good target for P2 to end? If not revisit the post here.


Now let's examine this chart above. If my count for Minor C of (Y) is correct thus far, Minor C would end at a very reasonable area near the converging trend lines.

Just some food for thought.

SPX 8-24


SPX 8/21/2009
Here was my attempt last Friday to count the waves.(Post)


SPX 8/24/2009


Do we have more clarity after today? I say not really, maybe a little bit.

Not only do we have signals indicating we may have topped, EWI has us going higher (their preferred count). Dan is leaning possibly towards a top, yet acknowledges that there is room for further upside. To add further to the confusion is what degree we should label these waves.

I previously mentioned that I am new to EW analysis but find it very intriguing. It is very rewarding when price moves as anticipated after correctly labeling a wave count. I have highlighted a few of these now since I have begun posting my charts.

Today's chart is yet another example. Granted this is at a very small degree and I admit the degree labeling may be wrong. However, because EW is all about fractals and the fact that the basic 5 wave impulse 3 wave corrective works at all degrees, one may still determine a path for the market once the proper count is determined.

In this case, I believe my wave 3s were correctly identified (because these are the easiest waves to identify) and today I expected the wave [iii] in blue to complete before blue [iv] began. So far so good.

Let's see if tomorrow completes wave [iv] at the 1018 gap and continues to follow the blue arrows I have placed on the chart. I will admit, my waves [iii], [iv] and [v] blue may be at a lower degree. Bottom line, there should be a move higher if this count is correct.

However, keep in mind there are indications out there of a possible P2 top. The waves down from today's 1035.81 top counted as a five. (Hush, but I think I see a small scale head and shoulders pattern again) So be prepared as well in the event we continue lower.

Of course there is another possible count out there that takes us lower but is not part of the P2 top. This alternate count is a Minor B expanded flat.

Based on this count, today's high would have completed Minute B of the Minor B expanded flat. This may work as well. So this is something to keep in mind.

If price behaves tomorrow in a way that indicates a Minor B expanded flat is in play, I will update my chart with some projections. Let's just say it will have something to do with my prior Fibonacci Confluence post.

Sunday, August 23, 2009

EW Channeling and Fibonacci Relationships Continued





As a continuation to my previous post , I added a trend line (in pink) highlighting a potential bearish wedge. Notice the lower trend line for the wedge shares the lower trend line for P2's lower channel line.

All lines seem to converge near the previous fourth wave extreme of 1044.31. Price appears to have several "resistance" levels to contend with so to speak near this area.

This will be an interesting week ahead and an area to watch indeed.

Saturday, August 22, 2009

EW Channeling and Fibonacci Relationships


P2 Channel


Wave (Y) Channel


P1 Channel

Perhaps channel lines and Fibonacci relationships for P2 and Wave (Y) may provide some perspective. Both may indicate where one may expect Wave (Y)and P2 to end.

Do you believe this rally is now getting tired? If so, the P2 mid channel and Wave (Y) upper channel line may provide a clue as to where Wave (Y) or P2 tops.

If you believe this rally has room to run, the P2 upper trend line may provide a clue. A move towards the P2 upper trend line would place price near 1159 or (Y) = (W).

Because this is a blog on EW analysis, I have to present what may be the most probable outcome (at the moment) based on the application of the rules, guidelines and techniques.

Certainly 1159 is attainable, because anything is possible, but what is most probable? Remember, EW analysis is about "limiting the possibilities and then ordering the relative probabilities of possible future market paths". (EWP, pg 95)

I would say at this point in time the first likely target would be the 1030 - 1070 range to focus on as a possible top. Below are a few reasons why:

1. On my previous post (Minute 1 of Y), Minute [v] = Minute [i] at 1030. This places price at the Wave (Y) mid channel line.

If Minute [v] = 1.618 x Minute [i], price ends up approximately near 1040.

2. The previous 4th wave extreme : Based on EW behavior, corrective waves typically terminate in this area.

3. Fibonacci relationships : Wave (Y) = .618x Wave (W), which is considered a very common relationship. This is just 4 SPX points away from the previous fourth wave extreme.

Wave c of (Y) = .618x Wave a of (Y). Either relationships may target the P2 mid channel line or Wave (Y) upper channel line.

4. The Wave (Y) Upper and Mid Channel Line : If price continued higher over time, it could hit the mid channel line over the next week near the previous fourth wave extreme and (Y) = .618 x (W). If price reached the upper channel line, it would reach the level where Wave c of (Y) = .618 x Wave a of (Y)

5. The P2 mid channel line : Price targeting the mid channel line would be an acceptable spot. An example of this is the Intermediate fifth wave low of 666.79 back in March.

The Intermediate 5th wave of P1 landed right on it's mid channel line. I take that as a signal that selling pressure at that time became exhausted.

So the same argument may go here. If buying pressure is exhausted, the mid channel line may be as far as she goes. This would be supported by clues #1 and 2 above.

One cannot ignore at this time the potential for price to be attracted to this area given all the relationships mentioned above. I'll be approaching this one level and one wave at a time.

Could P2 have topped on Friday? It is certainly possible as well. However, a signal for me would be if price broke below Wave b of (Y) at 978.51 and further confirmation with a break below the lower P2 channel line.

Click on the links for further reading on EW Channeling and Fibonacci relationships for corrective waves.

Friday, August 21, 2009

Minute 1 of Y




This is my best attempt at counting the sub-divided wave 3 that makes up Minor 1 of Y. Given this count, I anticipate a little push higher to complete Minute [iii] probably near 1033 if wave v (green) = .618x wave i (green).

I would think that Minute [iv] would retrace at least into the 1018-1016 range to fill in the gap below. We will see.

Bottom line, there is more upside expected.

ES- 8/21 AM UPDATE 5:50 PST



My previous wave count for ES last night may have been a little pre-mature. This looks like a better count and a possible end for this leg near 1018.

GL!

Thursday, August 20, 2009

ESU09- Thursday 8/20 11:10 PM PST



Could she be telling us something? Using Dan and Kenny's bullish count, ES may have completed this leg up.

Wave v completed just above the center line of the channel and has moved well below it's lower 2-4 trend line in a fairly impulsive fashion. At the time of the screen capture, it appears a minuette wave ii or iv was correcting that impulse lower. If the new trend continues, it may very well signal a top for SPX and others.

We'll see in the AM!

A Look At The Dow

UPDATE (8:30PM PST) By the looks of the ESU09 action so far tonight, I wonder if the X wave (or minute i of Minor C on the bullish count) is complete.

Will have to keep a close eye on this in the AM.







This is a follow to the PM update. While examining the Dow I noticed that price did not violate the descending trend line from the 8/7 high. This violation however occurred on the SPX today, however slightly.

I get so caught up analyzing SPX that I forget about the Dow, which usually presents much cleaner waves. In fact I believe EWP states that the Dow is the better index to analyze when counting waves.

Counting off the Dow is a little clearer and utilizing the line chart shows a much steeper wave for what might be an Ending Diagonal for wave 5 of C of X.

Note: the line chart only charts closing price so intraday highs and lows are not depicted like a bar chart would show.

The Dow may provide a clue (at the least it's a non-confirmation of SPX's break above the descending trend line) as to what this structure may be unfolding before us.

Will price find a ceiling at the descending trend line tomorrow at the conclusion of a possible Ending Diagonal? Will that be the conclusion of wave X?

As always, we will see tomorrow!

SPX- 8-20 PM Update



Apparently the Wave X Triangle and the Wave C of (X) Ending Diagonal has been ruled out of play (definitely set aside for now) because of some rule violations.

Rule violation for the Wave X Triangle:

The structure exceeded the 5 sub-wave count. Based on the structure today, there appears to be 7 waves. This would be a no-no (This does setup a possibility for a bullish count).

Rule violation for Wave C of (X) Ending Diagonal:

Subwave 4 of the ED, if properly labeled and if subwave iv is truly in place, does not end within the price territory of subwave 1, which it should if it is an ED.

The best bearish count on the table that remains is an X wave of Minor B to connect a double zigzag from 1018. Wave C of X is currently underway and if it equals 2.618x wave A of X = 1014.

Once complete, this would open up a second bearish alternative, a Minor 1 Leading Expanding Diagonal. I will just put this out there because it is hypothetical but just wanted you to be aware of this potential. More on this later if it looks like it truly is developing.

As I previously mentioned (http://waveprinciple.blogspot.com/2009/08/triangle-or-diagonal.html) should this structure turn into a Leading Expanding diagonal, per EWP (pg 40), these patterns usually occur at the start of market declines.

Dan and Kenny have good bullish counts for this leg so I won't attempt (too much work!) to put one out unless I see an alternative.

http://2.bp.blogspot.com/_TwUS3GyHKsQ/So3DBniArRI/AAAAAAAABcE/O04XUZEMg6M/s1600-h/SPXdaily.png

http://3.bp.blogspot.com/_goypolxEFd4/So2122m0PRI/AAAAAAAABsw/Qd2GSlgmwFk/s1600-h/SPX1minclose.png

Whether the bearish or bullish count plays out tomorrow or over the next few days, I think this current leg up is reaching it's apex and is looking to pullback. How large a retracement will be determined by which count (bearish/bullish) prevails.

My target of 965 has not changed. If this turns into a bullish count, I will be looking for the Fibonacci retracement levels once the top is identified.

SPX 8-20 AM UPDATE- X Wave Triangle


UPDATE:
This may very well be an X wave triangle with a sub-wave 5 throw-over or sub-wave 5 is working on it's b wave now. The final c wave then targets 1008-1010 just like the count below.



If the X wave count is still in affect, I have wave C of X developing an Ending Diagonal.

The current count is sub-wave 4 is in progress. I have sub-wave 5 hitting near 1008, which would correspond with 2 different trend lines. The first line being the upper trend line of the diagonal and the second being the descending trend line starting from the 1018 top.

We will see what happens!

Wednesday, August 19, 2009

TRIANGLE OR DIAGONAL?




Below are what I believe to be the most common counts out there:

UPDATE (9:20PM): I forgot to mention just by solely looking at the pattern, it looks like a pennant/flag that is not quite complete yet. Just using that interpretation alone, one would expect price to move towards the lower trend line once more before price thrusts out higher.

Whether this pattern plays out or not the original count 1) below may also take price to the same level.

---------------

1) A double ZZ for Minor B with the X wave at or near completion today
2) A 5 wave structure at minuette degree down for Minute A of Minor B

So I got to thinking. What are some out-of-the box counts (at least I think it's out-of-the box) besides the above that may be considered probable and not just possible?

Somehow the Fibonacci confluence at 965 is keeping me fixated on that level. And what's the first thing that comes to mind when you see 3-wave structures besides corrective waves? I see triangles and diagonals!

I have come up with alternative counts for these structures. However, both violate a rule if they end up being of the contracting type.

What may keep this count valid is if wave d tomorrow somehow finishes higher and maintains a 3-wave structure. If that were to occur, they both become the expanding type and those rule violations become moot.

Here are the alternatives with their respective violations:

1. Minute A of Minor B Leading Diagonal
- Current rule violation: wave 3 is longer than wave 1

2. Minor 1 Leading Diagonal (Very Bearish)
- Current rule violation: wave 3 is longer than wave 1

3. Minor B Triangle
- Current Rule violation: wave c is longer than wave a

Something to note. Should this structure turn into a leading expanding diagonal, per EWP (pg 40), these patterns usually occur at the start of market declines.

Update SPX 8-19

It looks like EWI now has a case for a MINOR B bottom. Let's just say it is the same argument that I just posted previously.

So we must keep an eye out for tomorrow's action. New highs may possibly mean the start of MINOR C up.

SPX 8-19



Wow. That was an impressive stand by the bulls today. Given that China tanked last night and a double digit decline in the minis prior to the open, I believe many folks believed we were going lower, including myself.

I can't say this was completely unexpected though because there were alternate wave counts out there calling for this extended correction. Dan's call for an X wave corrective to extend this MINOR B proved to be correct. So though it was not a top two alternate count for me, it was something I was aware of nonetheless as I mentioned yesterday.

In the end nothing has changed for me. All my counts remain the same.

Below I highlight a few things that indicate to me that we may likely see a leg lower tomorrow. Of course it goes without saying nothing is guaranteed.

1. The corrective move labeled xyz appears to be complete. Each wave has a nice Fibonacci proportion to the overall structure.

Wave W retraced iii of (c) 50%
Wave X retraced W 78.6%
Wave Y is just shy of Wave W x 1.618
Wave XYZ retraced iii of (c) 78.6%

2. Price has not made a new high in a week. There are two lower peaks since the 1018 top.

So even though there may be bulls out there to buy these dips, is this indicating that we are running out of buyers? I believe this trend will continue in the near term.

3. MACD has been showing a descending trend since mid-July. Lower highs have been contained within a descending trend line.

At today's close, the MACD is looking to kiss the descending trend line once again. Will it bounce and turn lower like it has previously done in the past month? I have highlighted turns in the market with the green arrows that correspond with those turns.

4. The alternate count remain the same as well because wave xyz retraced iii of (c) 78.6%. This still falls within the guidelines for a wave 2 correction.

Arguments for MINOR B's completion:

1. MINOR B retraced MINOR A 23.6%. Though this may be a small retracement, it may technically be enough.

2. MINOR B is just shy of 1.618 x MINOR A but that would be a satisfactory length per EWP.

I will say this action must be frustrating for the bears. I wonder how many are on the verge of jumping on the bandwagon. That will be a nice tell.

Looking forward to tomorrow's action.

ES AM UPDATE



Looks like the Sept E-mini is indicating a new impulse wave down. I guess we will see how many dip buyers are left to support the market.

Keep an eye on 965...

Tuesday, August 18, 2009

Another Perspective







Sometimes I find myself so caught up in trying to read the squiggles I end up getting lost. Taking a step back helps put things into perspective and helps to identify what the pattern may be.

At the 30 min level, the structure from yesterday's low up to today's close looks like a pretty clean expanded flat. That's it. Forget all that squiggle mess. Wave C is just shy of Wave A x 2.618.

Per EWP guidelines a clean zigzag would have helped confirm that this was more likely a wave 2 of some degree rather than a wave 4.

So tomorrow I am expecting a wave 5 or 3 to start and my first target will be somewhere along 965. If I start to see more zigzags, I will assume there is a little more correcting to go.

Fibonacci Projection Revisited









I just wanted to highlight the progression of this projection that I put out starting on 8/15. The green lines that I drew in highlighting the path of price are arbitrary and in no way was it meant to be a prediction of the path that price would take. It is uncanny how price seemed to follow my lines anyway. The main point I wanted you to consider was the actual price targets.

So far price is behaving.

It was difficult to count the squiggles today but I can say with certainty that the waves were corrective in nature. I would say just from a pattern standpoint, it looks like a bearish wedge/inverted flag, so I am expecting a reversal here shortly.

992.40 held today, which keeps my alternate count alive. Had price broken through, it would have invalidated that alternate count since wave 4s cannot move into the end of a wave 1.

It looks like HP reported better than expected profit and revenue. We will have to see how this will affect the structure by the tomorrow.

Here are the links for each post from beginning to present:

1. http://waveprinciple.blogspot.com/2009/08/price-projection.html

2. http://waveprinciple.blogspot.com/2009/08/channeling-p2-zigzag.html


3. http://waveprinciple.blogspot.com/2009/08/spx-fibonacci-projections.html

4. http://waveprinciple.blogspot.com/2009/08/fibonacci-confluence.html

RIMM Update 8-18



A retracement of yesterday's decline is to be expected today. So far, this may be a wave 2 (of wave C) retrace with wave 1 bottoming yesterday.

There is a gap down from yesterday that may get filled and if and when it does, that would be between 50-62%, a good retracement typical of a wave 2.

I noted in the chart that I may add to my short there on a bounce. Let's see what happens.

Don't forget about the 38.2% retracement level as well.

Monday, August 17, 2009

A Simple View of the Alternative






So what about this alternate count that I have. How should we expect to count it?

Let's just say this is the beginning of a new five wave structure down from the 1018 high at Minuette degree. We have Minuette i and ii completed and may be looking at Minuette iii starting today. If this is a Minuette iii, for some reason the structure resembles a 1-2, 1-2 wave pattern.

I was looking for some type of correction off today's bottom but that never fully materialized. On the 30 min chart, that corrective wave resembles a flat.

Here I'm labeling it as a possible SubMinuette ii as part of the 1-2, 1-2 structure. What does that leave us with then? Possibly a Minuette iii tomorrow after Sub Minuette ii completes?

The shape of this structure down thus far almost resembles the structure on the way up since the July low. Though this has nothing to do with EW/TA, it just seems like it would make for nice symmetry.

And what would all this mean? Lower prices than the anticipated 960.

Just something to think about...

FIbonacci Confluence



First off, I have to point out that I missed one price segment that I could have traced out on 8/14. This was the 1012.73 high - 994.60 low. A projection of 1.618 x this segment placed price right on the money with the other two clusters at 983.

Additionally there was a fourth segment that also landed at the same spot as well. I did not label it on the chart because it was getting too crowded and busy with the labels. Needless to say there were a total of four Fibonacci clusters at 983.

Obviously price hit that area today. However, the lesson here is that it would have given me an even greater degree of confidence that price would land here. Live and learn.

Well it looks like we are seeing a cluster yet again. Using the aforementioned price segment, labeled in green and the segment from today's drop, labeled in purple, we find a cluster at the 965 level.

Once again, this should give me the confidence to stay in the trade until price reaches this level. This dosen't mean, however, that we may not see a retracement first. If we do, I am expecting that to be a wave iv of some degree.

This new cluster makes me wonder if 965 now becomes a possible wave 3 of another degree. Perhaps my wave labels are incorrect and my wave (a) should be changed to (i) and (b) should to (ii). That would make this a wave (iii) that may possibly extend.

We won't know for sure, but you can bet I do feel more confident that price will reach this level. What wave and at what degree TBD.

SPX Fibonacci Projections



This chart was posted on 8/15(http://waveprinciple.blogspot.com/2009/08/channeling-p2-zigzag.html). I was projecting a wave 3 of some degree to land at the Fibonacci cluster. Look at the chart below and see the result.



It is pretty amazing. I think this is the first time I have finally seen the projection pan out!

The Fibonacci targets clustered right on the money so according to this technique, there was a high probability that price would be attracted to that level and most likely based on the count I had at the time it would represent a wave 3.

This may provide some perspective because in my earlier post just minutes ago, I was speculating whether wave v of (c) of MINOR B was in progress.

If this is to mean anything, it is possible only wave iii of (c) of MINOR B completed and we will see wave iv tomorrow before v completes.

I think while writing this the e-minis continued to fall so who knows, v may be in progress.

I'll take a look at the e-minis later and see if they provide further clues.

Just something to keep in mind. Anyway, I'm still amazed...