Wednesday, October 13, 2010

10/13/10 - EOD Update 3:30 PM

3:30 PM Update

I'd like to start off with this article by CNBC regarding the DOW's Golden Cross. Not much fanfare there with this signal vs the bear cross that everyone was talking about back in July along with the Hindenburg Omen.

Yours truly though noted it on 10/8 and felt the lack of interest may be bullish.

SPX 60 MIN PREFERRED

Here are the charts I wanted to get out for consistency's sake. My preferred as above shows the submicro (3) completed today and micro [4] was underway. I believe this is minute [iii] in progress since the late Aug rally began.

For this count to remain valid, 1168.68 must hold or we will have a (4)-(1) overlap, which is a rule violation.

One thing of concern is the bearish looking MACD. It is rolling over but that has happened a few times since this rally began. I'm thinking it's most likely confirming that a wave 4 down is on the way.

As you will see in the 5 min chart below, I believe submicro (4) ends near the 1176-1173 level. This fits in nicely with a 38-50% Fib retrace as well as the previous 1175 resistance level that is now providing support.

A bounce off this level will help confirm this count remains valid.

SPX 60 MIN ED OPTION

The ED option here remains and was very close to being invalidated per the count above. If the subwaves have been identified properly, micro [5] cannot exceed 1187.71 tomorrow.

Note that I also played it conservatively and noted that if micro [3] completed at 1168.68, micro [5] cannot breach 1192.52.

Once again, it is up to the bears to break this market down. There are a series of support levels below and ascending trendlines I'd like to see break down before confirming this move up is complete.

SPX 5 MIN

This chart should be self-explanatory.

**Note? The actual degree labels do not match up with the 60 min charts above. I do this because it is less cluttery at this scale and easier to label for me.**


I think tomorrow a long scalp may be worth taking a stab at if 1175 holds. There is a possibility that this could be an overextended minute [iii] that I may have mis-labeled and it crawls all the way up to 1200 and [iii]= 1.618*[i].

Don't forget the Reverse Fib chart is showing a very strong confluence at 1232.
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