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.
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