Tuesday, October 19, 2010

10/19/10 - EOD Update [10:22 PM] - 5 Min Squiggle, EUR/USD, DX

EOD Update [10:22 PM]

SPX - 5 Min

As promised here's a squiggle count for this entire move from the 1184.38 high on 10/13. I see the structures as a series of "threes".

/ES Futures (SPX)

Look at the futures' structure. Overlapping threes

EUR/USD Daily

EUR/USD 60 Min

EUR/USD also looks like it's working a wave 4. So far it's found support on the lower quarter channel.

/DX FUTURES

Since everyone is also watching the dollar. So far three waves up. So the equity indexes show three waves down and the dollar index shows three waves up.

Nice inverse correlation so far. So which one is corrective and which one is impulsive. The first to violate a 4-1 overlap will tell the story.

Feedback always welcome

EOD Update

It was a nice sell off today and as posted last night I wasn't surprised by the decline because I believe this may be a wave 4 pullback.

Two basic things occurred today which I believe are relevant to the bull case. First the market closed above the 13 day EMA and second, found support on the ascending channel it broke out of.

SPX MAs

Couple this with some of my counts and I think we may have found support for a wave 4 bottom. If not a bottom, a support area for wave 4 to consolidate above.

SPX Minute [iii] with Alternate (1)-(2)

Elliott Wave Oscillator

I post two charts that contain three options I'm weighing at the moment. I bring the Elliott Wave Oscillator EWO back as a count that I'm given more weight to now.

I'm still torn between this count and my preferred. The difference between the two is that both show a top for a wave 3. The EWO shows it as a minuette (iii) of minute [iii] top. The preferred shows it as a minute [iii] top.

The third option, which I don't believe is overly relevant is a nested 1-2 at the top for the final fifth of minute [iii]. The reason for this is the fact that we got a MACD daily sell signal today. Of course it doesn't mean we can rally up hard tomorrow but odds of that happening are not so high. Anyway, we'll keep that count in mind.

SPX - 5 Min

Why do I think this is still a wave 4 decline? The drop from yesterday's top counts best as a three wave structure. We have seen this before and sure I'll admit it looks pretty close to a five wave structure but just take a look at the hourly. It still looks like a "three"

If I get time tonight I'll try to get a 1 or 3 min squiggle count to see what's going with the structure off the 1185.53 top.

SPX Weekly Bear

For a more bearish view that is still longer term bullish, I have a weekly chart on the SPX showing a basic flat that I believe may also be occurring should we see protracted selling.

Wave B in this case has retrace A nearly 84% a pretty good retracement for a wave B in a flat. I believe 90% would be ideal. Should we see some selling, wave C would target the beginning of wave A or just a little below at an even 1000.
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