Thursday, September 30, 2010

9/30/10 EOD Update #2

EOD Update #2
Triangle Alternate Option

As posted at EOD, the chart at 12:25 and earlier at 9:05 AM I believe there may be a larger degree wave 4 developing if we have not seen the top yet. All the waves look corrective since the subminuette iii top on 9/21.

Though my initial feelings are a larger flat playing out, a triangle would be more appropriate given my larger count and what MACD is doing.

The chart above should be self-explanatory. I'm looking for subwave c to wrap up tomorrow somewhere near 1135-1131 for a 62% retracement of subwave b and then on to subwave d.

The red horizontal line is the line-in-the-sand for this triangle count. It marks the bottom of subwave a and no other subwave should react below it in order to remain a valid triangle.

However, if the subwave a low (1122.79) is taken out, it does not rule out the larger degree wave 4 option because then an expanded flat option comes into play.

If it turns out to be an expanded flat, wave c of the flat equals a at 1131 (hmmm, how convenient, support everyone is watching) and 1.618*a at 1115 (again how convenient because it is very close to the 200 SMA).

Ok. Keep in mind, my preferred count is below. Still can't ignore the bearish looking turn on the daily, but then again, it doesn't mean the market couldn't reverse its direction.

EOD Post

Well we certainly saw a thrust out of the ascending triangle this AM but was followed by a very bearish reversal. Throughout the day I tried to post some alternate counts but at the end of the day, I believe this may be the count to follow at the moment.

Wave v = .618*i and that is enough per EW guidance. The bear count was looking for 1158 to complete wave C of minor 2 and we got 1157.16, which is close enough.
If we are heading back down in either minuette (ii), my count, of Minor 3, bear count, 1131 needs to be taken out and more.

As I have been saying for several days, the daily MACD is setting up it's sell signal and each day it gets closer and closer. We may just be there.

Gotta keep an eye on those pivots if you trading this since we are still getting whipsawed up and down.

The other thing that may signal that we have reached the top of this leg is that we hit the top of the channel. The MA chart above shows a few things the bulls have going for them if we continue to see a further pullback.

We have rising MAs that will be tested and most likely provide some support. MACD broke over a trendline that it may backtest and find support at as well.

I still have a few alternate options that may indicate this move has not completed either, one being yet another wave 4 in progress. I'll get to those later tonight.

9/30/10 : 12:25 PM

12:25 PM

Here's another view of that option posted at 9:05 am. I had posted this chart a week or so ago as well. Will have to keep an eye on this.

We are at the top of the channel though, along with a bearish leaning MACD on the daily.

9:47 AM Update - ED OPTION

*****9:53 AM*** Forget the ED as it is drawn on this chart. Just realized subwave [3] is larger than [1]. Sorry about that but I still like the scenario presented below regarding chasing performance.
Here's the a different ED option that also works. I included the wave 2 alternate that I had mentioned in 8:41 AM post.

This ED option may work if we believe fund managers are going to chase performance into the close of the quarter as many pundits cite.

This would be my take on this scenario. If there is a final 5th wave up here for this ED, it must form a 3 wave structure, 5-3-5. Say the fund managers chase performance into the close, this forms a 5 wave up.

Tomorrow, the beginning of the new quarter, profits are taken off resulting in 3 waves down. Then comes mutual fund Monday next week to get our final 5 waves up.

Hmmmm... I'm kinda liking this option :) As always, we'll see.

9:05 AM Update

This is actually what I am thinking aS an alternate if the remaining key support levels hold. All this still looks to corrective up and down to me and potentially forming a flat for a larger degree wave 4.

The ED as I had labeled is not looking so wedgish anymore. 1122.79 is a level I'm watching as well for this count.

(8:41 AM Update)

I'm going to say that minuette (i) is complete. We saw a wave v thrust out of the triangle this am. Wave v achieved a .618 ratio to wave i and it hit the mid EW channel.

The only alternate left is the ending diagonal count, which will be completely voided should 1132.09 fail since subwave 4 would overlap subwave 2.

** I will also add that it is very possible that we are only seeing a wave 2 pullback of v, which may have begun at the 8/23 low. I'm not too confident of this but it certainly looks like this wave 2 of v pullback is a complex flat. Chart to come***

(7:57 AM Update)

In yesterday's EOD post, I showed that v=.618*i at 1156. Today we printed a high of 1157.12. Technically that would be enough for wave v and a common ratio to i as well as equality.

What we need to watch for now is the ending diagonal trendline (lower) to hold and lastly 1141.02 to hold (this is the start of wave v).

If 1141.02 breaks, this rally up is mostly likely over and we are beginning minuette (ii) down, which I have been waiting for.

(6:42 AM Update)

5 Min

I will add that the ending diagonal is still in play. I've made the adjustments above.

6:33 AM

Here's our answer.

Wednesday, September 29, 2010

9/29/10 EOD Update #2 (11:15 PM BOLLINGER BANDS)


Bollinger Bands

Those bands are tight which is signaling an explosive move is in store. Which will it be? A thrust out of the triangle or a breakdown out of the ending diagonal?

9:26 PM : NASDAQ

Here's a long term view of the Nasdaq Composite. Notice there is a big difference with this index vs the SPX or the DOW (See my DOW chart here. It's sporting a potential expanding triangle)?

Either we are seeing a very large triangle in the works or Grand Supercycle 4 completed at the March 2009 low.

There's a very large looking inverted head and shoulders pattern developing. This may be seen on the SPX (See my SPX version here) and DOW as well. The target for this IHS is approximately 4000.

Why would we care? I think this may support a Grand Supercycle count for the SPX as well as posted here over the weekend.

The NDX is pretty similar and looks like it is about to break out of its IHS.

Ok here is an update to my current count. I changed the triangle subwave labels to the primary and must correct my previous post. Since I added the Fibo for wave i (red). v=i at 1166 and not 1175 as previously posted. Wave v=.618*i at 1156, which is just about 1158, a level the bears are watching since per the bear count C=A here.

The purple line represents the triangle thrust target. This sits at 1174.

9/29/10 EOD Update

EOD Update
EOD - 60 Min

Though I have the triangle option labeled as the alternate as mentioned last night, I believe it is structure playing out. The ending diagonal option is still possible but I think based on today's action, the odds that this is a triangle is greater.

I didn't want to further clutter the chart but the breakout potential is looking like 1175 or so for the final v. v=i=1175 and the triangle thrust target also reaches this point.

I'll post some more charts later tonight highlighting this.

12:35 PM Update

Don't forget about my triangle alternate lables. That purple trendline needs to break to rule it out.

12:10 PM Update

Everything looks so wedgie. I'm gonna give this room for a possible top of a wave 3 though.

8:05 AM Update

Here's one to think about. If we take out [2] black at 1146.14, then this count is out. If this is right, we may see a retest of 1131 again today.

Tuesday, September 28, 2010

9/28/10 EOD Update - 10:05 PM Update

10:05 PM Update

After fixing the link issues, I figured I add the ED/Tri trendlines to the chart so that it is easier to see what may be happening.

I'd say if 1150 fails to break over the next few days, the tri possibility increases.

9:45 PM Update

First of all, I hope the chart links have been corrected here.

Just going back to basics here, one cannot argue that technically the market is pushing higher. We have rising MAs with the 13 and 21 EMAs over the 200 SMA. The 34 EMA and 50 SMA is not too far behind.

Several posts ago I questioned whether this may be an extended wave three like we saw out of the failed head and shoulders back in July 2009. That wave just kept pushing higher and higher. We may just do the same here all the way to 1250 (head and shoulders target and diamond bottom) without a meaningful pullback. I guess we'll have to see.

I readjusted the neckline of the purple inverted head and shoulders. The market backtested the neckline last week as well as the 13 EMA.

The daily MACD is still hinting atsome type of pullback shortly just like the 60 min MACD the other day, which we saw with today's pullback though it was very termporary.

There is a clear rising channel which the market is at the top at now. It doesn't mean it can't breakout out of it and up but again, the daily MACD may be showing us something.

Keep in mind the pullback I'm looking for is only a wave (ii) because the weekly MACD is rising after having crossed up through it's centerline 2 weeks ago.

Earlier today I posted at 9:55 AM that I was seeing yet another ascending triangle or ending diagonal. I think at this juncture both imply possibly a higher high to come.

I have labeled a potential wave 5 ending diagonal on the chart below. I have also labeled an alternate ascending triangle as well.

The 60 min MACD is starting to turn bullish again and is very close to it's descending trendline. We either see one final negative divergence or it breaks out of that trend.

9/28/10 10:05 AM Update

10:05 AM Update
10:05 AM - Daily Preferred

We still must keep an
eye on the daily. The histos suggest the turn is around the corner.

9:55 AM Update

I'm sensing a possible ascending triangle or ending diagonal again starting from 9/23.

8:48 AM Update
8:38 AM - 60 Min

I'm still keeping an eye on the top of that green channel and also still leaving room for the possibility that (i) completed.

8:34 AM Update

8:34 AM - 60 Min

Here's another way to count this. We are still in v. This am's pullback was [2]. Keep an eye on that green channel though. We are at the top of it right now.

Notice the 60 min MACD histos? They are starting to turn positive.

8:05 AM Update

8:05 AM - 5 MIN

Here's the problem. I show five down and currently five up? The larger five down can't be complete if that was the start of a correction. One would expect a three up and then another five down.

However, if today's low was part of a wave C, then that would be it. The bounce off the lows this am clearly counts as five waves up. That may only be part of wave a up and now we are seeing a b wave correction down with a final c wave up to 62% at 1143 as seen below?

7:50 AM Update

7:50 AM - 60 Min

What a nice bounce. 1131 most likely will hold as new support. Look at the hammer candle closing right on that lower trendline of the ascending channel.

The 15 min MACD is looking to reverse higher. I'm taking my scalp off on this next little pullback off the bounce this am.

7:08 AM Update
7:08 AM - 60 MIN

Well, what do you know. My short scalp is profiting nicely!

Looks like the triple negative divergence is following through. I zoomed into last night's 10:00 PM chart and added the Fib extension of alt c.

The Fibs are in red. c=a = 1124 and c=1.618*a=1107. So if this is just a correction again of some wave 4, I would expect 1123-1124 to be tested. Of course there is a confluence at 1107 as this is also the 38.2% retracement of the rally since 8/27.

I'll try to get a 5min count out because as we approach 1131 (new support) we need to see what the structure looks like. Everything under 15 mins is looking a quite oversold.

Monday, September 27, 2010

9/27/10 - EOD Update - 10:00 PM

I added a few things to this chart and made a correction for minuette (ii). As posted earlier, there is a MACD triple negative divergence at hand.

I wanted to point out what happened after the previous triple, which actually looks more like a quadruple neg divergence. That quadruple resulted in a pullback that I have labeled minute [ii] on my other charts.

Now that we are there again, I'm expecting that minuette (ii) pullback.

I added alternate labels near the top as well. It is possible we are working on an a-b-c flat pullback. I don't show it on the chart above but if c=1.618a at 1107, which equals a 38.2% retracement of the rally starting from 8/27. c=a is at 1123.

9/27/10 - EOD 1:15 PM Update

EOD 1:15 PM Update
EOD - 60 MIN

I apologize for always switching charting programs on ya. It just depends on what I have available at the moment.

Over the past few days, I have been watching the 30 and 60 min MACDs and looking for them to respect their descending and ascending trendlines and to indicate whether or not this leg up was coming to an end for minuette (i).

So far, I think it looks pretty good and today may have seen the conclusion of minuette (i), at least the odds are pretty high IMHO. First the structure looks like a pretty clean 5 waves up. Second, as previously mentioned, the 60 min MACD respected it's descending trendline and went into a sell signal into the close. Third, MACD is sporting a triple negative divergence.

I'm speculating that we are moving onto minuette (ii) and plan to hold my short scalp from last week down to the ascending trendline on MACD if the structure looks corrective up to that point.

There is always a caveat to all this. On a 5-15 min scale, it does appear today's selloff can still be a wave c of 4 before a final 5th higher is put in. But again, I think I like my chances here and even if there is a final fifth, it's very close to ending anyway.

That is all for now.

12:56 PM Update

We have a 60 min MACD sell signal.

8:16 AM Update

Finally have that 30 MACD sell signal. The hourly is up next.

8:16 AM - 60 MIN

7:21 AM Update
7:21 AM - 5 MIN

As posted at EOD last Friday, the wave structure was looking like a diagonal and so far this AM I think we got our answer for now, an ending diagonal.

The strength of rally suggest that this may only be part of a wave 3 up and today's correction is a wave 4. But as I pointed out last week, the 30 and 60 min MACD were both slanting towards the bear side.

7:21 AM - 30 MIN

The 30 min Histos have just about turn negative and notice again the trendline resistance (green) that MACD is following.

Sunday, September 26, 2010


I have posted the top chart before and I have previously posted this count about a year ago or so.

So why can't the Mar 09 low be counted as the end of a Grand Supercycle wave 4? That structure since 2000 looks like a textbook flat. Cycle Wave C extends just beyond Cycle A and at a very acceptable Fib extension.


This is a figure from Elliot Wave International on flats. Click here for an explanation.

Just something to think about.

9/26/10 - Channel Watch And A Failed Head and Shoulders?

Just drawing some channels tonight and came up with this one, which is a little different than the one I have been following.

I drew the EW channel using the end points for waves 2 and 4 as prescribed by EWP and drew a parallel line at the termination point of wave 3. All this of course assumes this structure off the March 2009 bottom is working on 5 waves up.

Now look at the the light blue line which signifies the center channel. The market has respected this line quite nicely.

My near term count has us wrapping up minuette (i) of minute [iii], which would match up well with the market finding resistance at the center channel again. I'm now expecting/waiting for a minuette (ii) pullback.

I don't show it on the chart but a 50% (typical wave 2 retrace) retracement would hit the yellow quarter channel below, which the market has also respected in this rally.

Remember the failed H/S in July 09? Have we just witnessed a repeat (and yes I'm still watching the larger one)?

Saturday, September 25, 2010

9/25/10 - Bullish Count [Edit- Preferred Count Added]

Daily Preferred

And before all you longer term bears become upset, here is a reminder of what my daily preferred count is. I forgot to post this earlier.

It is longer term bearish but intermediate term bullish. I have followed this count for quite some time now.

I read on Yelnick today that Neely went bullish. Guess what Neely's count is? You guessed it, it is similar to the one above.

Bull Count

I have posted a variation of this count as an alternate in the past. Though I haven't followed up with updates, I have constantly followed it.

This is something one should be aware of. I know there will be perma-bears out there who will not agree with this and come up with various reasons as to why this market should crash based pn fundamentals, global macro and etc.

All I can say is you gotta keep an open mind and see both sides of the count especially if the G is looking to prop this market.

Friday, September 24, 2010

9/24/10 - EOD Update

EOD Update

What a strong day today. That weekly MACD centerline crossover is showing her strength.

Here's a look at the 5 min chart. So was this move higher today a final wave 5 or (c) of my minuette (ii) or a larger wave 4?

And is that an ascending triangle (bullish) or an ending diagonal (bearish) into the close? We will know shortly next week.

The daily MACD took a a little detour today but the 30 and 60 min are looking like a sell signal is coming up. On the 60 min the negative divergence continues to build and if a triple divergence were to occur, a final little high in the market would mean we see a final little pop higher.

Notice MACD has hit that descending trendline. I'm holding onto my short scalp over the weekend. Gotta run for now.

Will get more charts out over the weekend.

11:06 AM Update

15 Min MACD sell signal so gotta watch out to see if this is the top of this leg. Gonna scalp a short here.

I don't know what is going on with Blogger. Anyway, I've increased the size of the image. Hopefully you can view it this way for now.

8:44 AM Update
8:44 AM -
I apologize for the link errors for the previous posts. I hope to get that resolved later today.

In the mean time, here is a new channel based off the 1010 and 1040 lows. Notice the top of the channel is currently at 1158. This is a relevant level since wave 3 or C = 1 or A depending on what count you are using.

I think it goes without saying that minuette (ii) is not in progress yet. If you look at the structure at this degree, it now really counts well as 5 waves up.

We'll see if she hits that 1158 level or if this final 5th truncates or if we continue to see this wave 3 extend as I have also speculated.

Wave iv again?

I will also say that this may still be a flat of a larger wave 4 even if we take out yesterday's high. Something to keep in mind if we sell off, especially if we can't take out yesterday's high or even if we sell off after taking out yesterday's high fractionally.

Also keep in mind the guideline of alternation. If this is still part of a wave iv, a triangle is always possible since wave ii was sharp.

5:48 AM Update
5:48 AM - 5 MIN

Wow. Futures just popped on some durable goods news. This may confirm the wave (c) that I'm expecting today or we had bottomed on yet another wave 4 and this pop starts off another wave 5 up.

Yesterday I also speculated that we may be slowly melting up in a never ending wave 3 extension (see 8:42 AM update). We will have to see.

I'll continue to watch the MAs and MACD for signs. I'm still watching the daily MACD since it is very close to a sell signal. It is possible this could be a final 5th up without really reversing it's course.

Thursday, September 23, 2010

9/23/10 - Interesting Charts Update

Opt 2

Opt 3
I'd like to comment on Opt 3 for a quick sec. The blue Fibs are extensions of wave (A). Assuming wave (B) is complete, projecting from the top of (B), (C) =.618*(A) at 1021 and (C) = (A) at 942.

Now notice the Fib confluence at the 50% retracement of the entire rally since Mar 2009. It is nearly identical to the Fib extension of (A).

So if further selling is in the cards, this may be a level to keep an eye on.

9/23/10 (EOD Update)

 (EOD Update)

I'm going to stick to my EOD post #2 from yesterday and assume that we are in minuette (ii). The daily MACD is setting up a sell signal. 

As the 5 min chart above shows, we may have completed wave (b) of b for a potential flat or zigzag. So with this count, we may see a little rally and then further selling to form wave c of (ii) and the daily MACD sell signal triggers.

I'm guessing (ii) may find support at the MACD trendline support. 

One additional alternate I will add here is that we are in c of (ii) now and all we get is a pullback to the 200 daily SMA (1116) or 13 daily EMA (1119).

A second alternate is that this may still be a wave 4.

Ok. Gotta run for the day.

(12:22 PM Update)

12:22 PM - 5 MIN
Had to step away for a bit. Looks like it is struggling to perhaps make a flat or zigzag.

(8:42 AM Update - Wave 3 Extension?) 

8:42 AM - 60 MIN

This is all starting to remind me of that rally back in July 2009. We had a wave 3 that just kept extending and we all were scratching our heads trying to find the correct count. 

That was at a time when I was a true P3 bear-believer. I've learned a thing or two since then. Perhaps we are seeing the same thing again. So this 60 min chart is just a thought.

(7:38 AM Update)

7:38 AM - 5 MIN

This may be the correct labeling afterall. As I mentioned earlier, I didn't like the way wave [A] counted.  We'll get confirmation of this if the market can climb back over the descending trendline.

Off the bottom so far, it appears we may have 5 waves up. A 38% retrace would take us back to 1130, it that occurs, it may not be a bad opp to scalp the bounce higher for a wave 3/c.

(7:35 AM Update)

I have to add that the 15 and 30 min MACD is starting to look bullish and possibly may be confirming my hunch that this pullback may be complete. We'll see..

(7:21 AM Update)

7:21 AM - 5 MIN
Well it appears we didn't get the higher retrace for [B] as posted yesterday at EOD. However, as posted in my EOD#2, I was still expecting a selloff and sure enough we got it. This certainly looks more like a simple corrective zigzag, A-B-C at the moment.

I don't necessarily like the way wave [A] counts because it looks more corrective (overlapping) than impulsive. That is fine though since I do expect the sell off to be corrective in nature.

The blue Fibs on the chart are extensions of wave [A]. [C]=[A] at 1120 and 1.618*[A] at 1109. Remember, 1109 has some significance as posted last night on the 60 min chart and re-posted below

7:21 AM - 60 MIN
Notice the hammer forming on the 60 min right on the 50 SMA. If we bounce here and make a higher high, I may have to count this pullback as a wave 4 and I already have one in mind. I won't place the labels yet because I think we may see some further selling.