Thursday, April 22, 2010

4/22/10 - SPX EOD [10:15 PM PST Update]

[10:15 PM PST Update]


I think it would behoove us to count the squiggles of this potential triangle. The 15 min chart shows the count as I have below on the 60 minute chart. Based on the squiggles, if minute [iii] is considered complete at 1213, the subwaves of the triangle best indicate that only (a) is complete and (b) close to it. Subwaves (c) - (e) would have to form next.

If one were to accept that minute [iii] completed at the 1191.80 top, then the labels would indicate that subwaves (a) - (c) are complete and (d) near completion with (e) to come.

The 3 minute chart above shows that either subwave (b) or (d) is working on it's final micro waves [4] and [5].

If for some reason the market happens to thrust above 1213, we will have to accept that the triangle completed at 1190.18.

I think anyone holding a short position may want to use tomorrow's pullback as a cover opportunity if the market bounces before taking out 1190.18 because if it fails to do so, it most likely confirms that new highs are to follow before any lower lows.
[3:50 PM PST Update]



Ok. ApartofNY in the CiL reminded me of another option I have posted on a few times here as well. See here for that.

What 1213 may have represented was the top of minute [iii], one of 3 tops I had been questioning all along as reflected on my daily chart.

I know I have been swapping alternate counts around (and hopefully you have been using the links at the top of my blog to keep track of them) but this was #2 for a bit.

The chart above highlights the potential triangle for minute [iv]. I show it starting in two potential places. For now, I will use 1213 as the top of [iii] but as an option for this chart, [iii] may have also topped at 1191.80.

EWP states that often times EW analyst will be a little premature in counting the subwaves for triangles, hence I have placed some optional labels for the subwaves in gray.

If the triangle started at the 1213 top, I show that subwaves (a) thru (d) have completed. However, I think that may be a little premature so there is an optional label showing that we closed today only forming (b). The squiggle counts may justify this as well.

The second option, where the triangle starts at 1191.80 has subwaves (a) thru (e) completed, with an option that only (d) completed today into the close.

A third option for this alternate count speculates that [iv] may not be a triangle at all and may just form a flat/expanded flat. Notice the gray label below near 1060. That is not there randomly. That assumes that if [iv] becomes an expanded flat, (c) would equal 1.618*(a), which would also be consistent with an EW guideline that states that [iv] typically completes near the price territory of the previous wave 4 (this is the triangle for minute [iii]).



So much for that leading expanding diagonal count. Unfortunately there are still several options out there but I am left with two bullish ones that I feel are the most appropriate at the moment. My bear count has us working on

I have to give Columbia1 of EW Trends andCharts credit for reminding me of this triangle option. My count is somewhat different than his but both imply a thrust higher in the near future.

Notice on the triangle chart, I have minute [iii] as an option for the top at 1191.80 with this triangle playing out as minute [iv]. This is something I had previously presented at the end of March when we were anticipating the breakout of the previous triangle. See here for that.

The 60 min triangle chart today highlights the larger triangle option. I have this either representing a B wave of (Z) or minute [iv] of Minor A of (Z). Refer to the daily chart for the overall view.
We either completed [d] today and should expect an [e] wave pullback before shooting higher or, [e] was completed today as I show in the chart.

I do have some alternate labels in gray on the chart. Please be mindful of those potential counts.

The second bullish option I show is one ending this leg since Feb with an expanding ending diagonal. As mentioned previously, this pattern, based on EWP is a rare pattern. Some argue it is quite common but I believe those patterns aren't truly of the expanded variety.

Anyway, based on the count and the expanding nature of the structure, one cannot ignore this potential pattern as it is playing out. I have it wrapping up it's final [C] wave to complete the formation. The Fib markers represent the length of [A] of (c) at 100 and 161.8%.

So it may possibly target 1216-1232 respectively in a 5 wave impulse higher.

The 5 minute chart highlights the internal count for this expanding ending diagonal (as well as the bear count. See below). The degrees are off on that chart but imply the same thing.

As for a bearish option, the 5 minute chart also highlights this. Working off the 1213.68 high, the first wave down is either minuette (a) or (i). The bounce off 1183.68 is working on (b) or possibly (ii).

For the bear options, if 1213.68 is taken out, the wave (ii) option is off the table. If tomorrow the bears cannot take out 1183.68 (my [c] wave label for the triangle), then the triangle count is alive and well.

So any bears caught today may have an opportunity, albeit a quick one tomorrow to cover/exit because whether the triangle option is in play or the expanding diagonal option is in play, we are most likely going to see newer highs.



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