Wednesday, March 31, 2010

3/31/10 - SPX : Minute [iii] in Progress?

I have to admit I had been thinking of this count but did not give it too much thought but will say, Nate's Market Analysis inspired me to pose this count as a real alternative.

This count may work out well as the end of minute [iii] would take price either towards the center channel line or the top channel line prior to another pullback for a true minute [iv], which may be sharp if it were to alternate with minute [ii].

A larger wave 4 would bring more consolidation to the market to relieve any overbought pressure before it makes one final climb towards 1220ish or so. So I'm putting this count out there as well as a pretty good one to watch.

Be aware the degrees are different than my preferred count.

3/31/10 - SPX EOD [9:50 PM Update TRIANGLE COMPLETE?]

Mini Update

The same applies for the mini as well.
[9:50 PM Update]

Just a quote from Elliott Wave Principle, 10th Ed., Pg 51, regarding triangles:

"In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle. Elliott used the word "thrust" in referring to this swift, short motive wave following a triangle. The thrust is usually an impulse but can be an ending diagonal. In powerful markets, there is no thrust, but instead a prolonged fifth wave. So if a fifth wave following a triangle pushes past a normal thrust measurement, it is signaling a likely protracted wave."

"On the basis of our experience with triangles, as the example in Figure 3-15 illustrates, we propose that often the time at which the boundary lines of a contracting triangle reach an apex coincides exactly with a turning point in the market. Perhaps the frequency of this occurrence would justify its inclusion among the guidelines associated with the Wave Principle." 

The above appears to fit very well with the chart just below titled "TRIANGLE COMPLETED"

I forgot to add that this triangle may be done. The count works, price respected the triangle trendlines (a-c and b-d) and price respected the EW 2-4 trend channel (in green). See the SPX Main Overview count below for a overall view of the channel.

We'll see tomorrow!



Another boring day in the market. The top chart shows the alternation between minute [ii] and [iv]. I also like the fact that price has respected the green channel thus far. 

The channel, by the way, was drawn using the end points of [i] and [iii] and projecting for [iv] by drawing a line parallel to that one using the end point of [ii]. This is a classic Elliott Wave channel.

The second chart is a close up of what I believe to be a triangle for minute [iv].  As previously labeled on prior charts, subwaves (c) and (d)  may still be in the works. I added a red triangle trendline anticipation of this possibilty. The lines are arbitrarily drawn in once again.

The structure after the 1180.68 top may only be wave (c) or (d). One thing is for sure, price is converging so we are approaching an end here soon and a resolution to the move out of this consolidation period. 
The same levels I am watching have not changed. Breach 1152.88 and the triangle fails. Breach 1180.68 and we confirm a thrust out of the triangle and I will look for  a 5 wave move up to complete this leg off 1044.50.

3/31/10 - SPX AM Update [11:00 AM PST Update]

[11:00 AM PST Update]
A quick update. I do not have access to my charts right now. It is possible minute [iii] completed at 1180.68 and the triangle forms from there.

[7:10 AM PST Update]

Tuesday, March 30, 2010

3/30/10 - SPX EOD [10:30 PM PST Update]

[10:30 PM PST Update]

 SPX Main Overview
SPX Triangle 

The top chart is an update of the main count. The second chart is a closeup of the minute [iv] triangle. I show a potential target of 1208ish for minute [v] if the thrust estimate is correct and if minute [v] = .618[i]

The ascending black trendline connects the Dec 2008, Oct 2009 and Dec 2009 highs. Perhaps minute [iv] touches that area.

[3:10 PM PST Update]

The above chart is an update to the ED option. I must give credit to HumbleStudent from the CiL. I think this is a legitimate option.

My primary is still the triangle option below but one must certainly keep an eye on this count.

The ED Option

What's new? Still looks like the triangle for [iv] is still in progress. I show wave (d) complete with (e) in progress, of which, [A] and [B] of (e) looks to be complete.

It is possible that (c) and (d) are not complete. We'll know (c) is not complete if the lower trendline is broken but price does not breach 1152.88. The same goes for (d) if it breaches the upper trendline but does not breach 1180.68.

There is one difference between the two, if 1180.68 is breached, the triangle may still be counted ads complete. Breach below 1152.88 and the triangle option is out.

The last chart is the ED option. It is looking pretty good as well. One final wave [C] is anticipated.

3/30/10 - SPX AM Update [9:34 AM PST Update]

**** It has been brought to my attention that the previous versions of the above chart was on linear scale. I have made the correct adustments (very minor) and placed the chart on log scale. *** All other charts are log scale. **** Thanks Kazoom!
[9:34 AM PST Update]

This triangle is shaping up nicely. [B] of (c) is a 62% retrace of [A] and i have (e) of [iv] at [C] =[A]. We'll see!

[7:40 AM PST Update]

This chart assumes minute [iv] is still in progress and that the triangle lines are correct (it all may still be in progress).

The blue lines represent the triangle thrust. The fibs (red) represent the length of minute [i]. Minute [v] would equal .618 [i] near the thrust target.

Just something to keep in mind.

A possible triangle breakout? Maybe but I'm still keeping an eye on the 1180.68 level, which is wave (b). Until that is breached, this triangle is still in the works.

But don't forget that Ending Diagonal option as well (second chart).


Monday, March 29, 2010

3/29/10 - FIB RATIO

This could be a telling chart. This is a follow up to my previous post,

"Fibonacci Techniques for Math Geeks -- and Everyone Else, Too",
courtesy of EWI. It's a pretty interesting read. If you join Club EWI (it's free), you can download the PDF file. 

The above chart of the SPX utilizes a similiar technique shown by Jeffrey Kennedy of EWI in the article. It is a "reverse Fibonacci" application

Fibonacci Techniques for Math Geeks -- and Everyone Else, Too

Fibonacci Techniques for Math Geeks -- and Everyone Else, Too
March 29, 2010

By Editorial Staff

The word Fibonacci Fibonacci Trading: How to Master the Time and Price AdvantageFibonacci Analysis (Bloomberg Professional)(pronounced fib-oh-notch-ee) can draw either blank stares or an enthusiastic response. There's hardly any in-between ground. But for those who ask how an esoteric mathematical relationship can apply to price charts and trading, here's a quick lesson. Everyone who uses Elliott wave analysis will sooner or later want to try using Fibo techniques, and Elliott Wave International's Jeff Kennedy has written about five of them in a Trader's Classroom column. For an example of why people are so fascinated by Fibonacci, read part of Kennedy's article here:
* * * * *
How to Apply Fibonacci Math to Real-World Trading
Have you ever given an expensive toy to a small child and watched while the child had less fun playing with the toy than with the box that it came in? In fact, I can remember some of the boxes I played with as a child that became spaceships, time machines or vehicles to use on dinosaur safaris.
In many ways, Fibonacci math is just like the box kids enjoy playing with imaginatively for hours on end. It's hard to imagine a wrong way to apply Fibonacci ratios or multiples to financial markets, and new ways are being tested every day. Let's look at just some of the ways I apply Fibonacci math in my own analysis.
Fibonacci Retracements
Financial markets demonstrate an uncanny propensity to reverse at certain Fibonacci levels. The most common Fibonacci ratios I use to forecast retracements are .382, .500 and .618. On occasion, I find .236 and .786 useful, but I prefer to stick with the big three. You can imagine how helpful these can be: Knowing where a corrective move is likely to end often identifies high-probability trade setups (Figures 7-1 and 7-2).
figure 7-1
figure 7-2
Kennedy then goes on to explain Fibonacci extensions, circles, fans and time, using 11 charts to show what he means. Whether or not you are a math geek, you can learn a lot from this six-page introduction to Fibonacci math.
Get Your Fibonacci Techniques Right Here. Jeffrey Kennedy has been using and teaching these techniques for years, and he has written a quick description of five Fibonacci techniques in his Trader's Classroom column -- now available to you for free by signing up as a Club EWI member. Read more about the 6-page report here.
Elliott Wave InternationalElliott Wave International Educational DVD Series: Volumes 1 - 10Disc 1. Introduction to the Elliott Wave Principle (EWI) is the worlds largest market forecasting firm. EWIs 20-plus analysts provide around-the-clock forecasts of every major market in the world via the internet and proprietary web systems like Reuters and Bloomberg. EWIs educational services include conferences, workshops, webinars, video tapes, special reports, books and one of the internets richest free content programs, Club EWI.

3/29/10 - SPX EOD

Here is an update of my preferred count. Alternates are in gray.

Notice the alternation starting to develop between [i] and [iv]?

SPX mini looks like it is still on track to form that triangle. It appears subwave (d) of [iv] needs one final little wave c up to complete (d).

 Alternate Option

Nothing new today. As I stressed the past week or so, as we continue to see this sideways action, the case for a triangle is building.

I'm showing that we are either wrapping up subwave (d) or still working on [B] of (d) or it's possible a smaller triangle is forming for [B] of (d).

One other option that I will be exploring is whether this is a triangle for minute [iv] or just for minute [iii]

Earlier I posted a chart that highlights my alternate count. See here for this count. This count is starting to appeal to me more as well. Until then, the main chart above is still my preferred until proven otherwise.

The last alternate option that I'd like to follow up on is the ED count that I have on the second chart above. It is possible that the ED is coming to an end but the question remains: 1) Is it only minute [iii]? 2) An end to [y] of C of (Z)?  or 3) the end of A of (Z).

3/29/10 - SPX Alternate and E-mini Update [7:50 AM PST Update]

[7:50 AM PST Update]

Here's an update to the triangle. It's slowly progressing. I have also placed an alternate for (c) of the triangle if it turns out to be a complex subwave form as is typical in triangles. The placement of the (c) alternate is a rough estimate. As long as it does not breach (a) the count remains valid.

So far SPX mini still looks like it wants to complete subwave (d) of my proposed triangle. We'll see what type of sideways chop we have today.

The second chart is an alternate count I have had on my preferred chart for a while now. I put this chart together so it is a little easier to view since my main chart was getting a little clustered.

The blue Fib lines represent the length of intermediate (W). It should be noted the (Y) = (W). Projecting for (Z) there are two levels I'm watching, (Z)= .618 (W) and (Z)=(W).  (Z)= .618 (W) at approximately 1220, that's the 61.8% retracement level of the 2008 crash.

My preferred is still the same but let's keep an eye on this count as well.

Sunday, March 28, 2010

3/28/10 - E-mini (SPX)

This is a count of the mini off the bottom (SPX equivalent is 1044.50). I've been stressing this triangle for minute [iv] and so far the case for this count continues to strengthen.

The line chart shows some fairly clear 3-wave substructures for the triangle so far. Please note that the upper triangle trendline was drawn in arbitrarily. The lower trendline may be adjusted if (c) is not complete.

The count remains valid unless wave (b) is breached at the top or wave (a) is breached below. So either trendline may still be adjusted.

Let's see what the minis do overnight.

Saturday, March 27, 2010

3/26/10 - SPX EOD




Here are my current options. I know there is quite a few.

My preferred has remained the same until proven otherwise. The main overview chart above highlights the count. I am still looking for the completion of Minute [iv] of Minor C of Intermediate (Z).

The various options are highlighted by the other charts. The secondary count that I believe may be in progress is that Minor B is underway.

Gotta enjoy the weekend so check back Sunday for possibly more charts and commentary.

Friday, March 26, 2010

3/26/10 - SPX AM Update [9:36 AM Update]

[9:36 AM Update]

The bottom chart is yet another one to keep an eye on.


A potential H&S in the works? If we don't see any follow through from yesterday's reversal and continue to see sideways chop, the case for the triangle will build.

Should selling resume, keep alternate minor wave B in mind.

Thursday, March 25, 2010

3/25/10 - SPX EOD [10:16PM PST Update]

 [10:16PM PST Update]

 A minor wave B in progress would fit with the completion of the Trannies and da RUT.

 Are the trannies done???

What about the RUT?
[9:39PM PST Update]

The chart above highlights two channels, one in green and the other in red. The channels are derived from the end points of minutes [i] and [iii] and drawing a parallel line and connecting it to the end of minute [ii]. I have two different channels here because it is my belief that today's high of 1180.68 may have only been the completion of minute [iii].

The preferred view at the moment is that minute [iii] topped at 1169.84 where I originally had it labeled and where the original green channel line was drawn.

This is somewhat relevant because EW channels help forecast where wave 4 may complete. Often times it will fall on the lower channel line that is parallel to the one drawn by connecting the end points of waves 1 and 3.

Though difficult to see on the chart above, the approximate wave [iv] target for the green channel is 1155 and 1150 for the red channel. Naturally, the long [iv] takes to develop, the targets for the channel rise since the channel line is rising higher thru time.
[3:53PM PST Update]

I forgot to mention that the top today may have only completed minute [iii] or Minor A as labeled in gray as alternatives.

Oh and that smaller head and shoulders (green) target was met by the way. I have a stinkin suspicion they may be gunning for that larger (purple) one now.


Still not much going on. There are a few scenarios going on here based on my count. The first is that minute [iv] is still working out an expanded flat, which is the preferred at the moment. (c) of [iv] may target the 1.618 blue Fib line.

The alternate view is that [iv] may be forming a triangle. The path and labels are in gray. Until price breaks 1152.88, this formation will remain valid.

As the top chart shows, [iv] may target the lower channel line if the expanded flat plays out. Keep in mind a potential head and shoulders may be in the works. The head is at 1180.68 and the left shoulder is at the a of (b). The H&S target would also target the lower channel.

Stay tuned....