Wednesday, October 6, 2010

10/6/10 EOD 7:50 PM Update #2 (11:24 PM INDU Update)

(11:24 PM INDU Update)

11:24 PM - INDU 3 Min

I have to give credit to Raptos and Cobra (Cobra's Market View) for steering me towards the INDU. I haven't counted it in a very long time.

But tonight I took a peak because earlier today in comments, Raptos mentioned that he saw a triangle on the YM (Dow Mini Futures). Cobra mentioned in his latest post that the INDU was leading and it recently broke above it's 5/13 high. The SPX equivalent would be 1173.

So what were the results of my count? I think it may be confirming what I posted for the SPX earlier tonight. There is a good chance that this leg up off the 10/4 low may be complete.

Now before the bears get all excited, keep in mind where this all fits into the counts. I understand there is a bear count looking for this entire leg off the 8/27 low to conclude which will result in a bearish wave 3 down.

However, this may finally confirm the end of my minuette (i) count I have been watching for. See my daily bull and bear options here to get an idea as to where this all fits.

Two things that stand out for me though on this 3 min count that may be suspect is the fact that 1) the market backtested that 5/13 resistance area and successfully bounced and 2) the retrace of ii pink retraced i pink by 78.6%.

Though that retrace does not violate an EW rule, it just lowers the probability that this is a wave ii retrace.

What may have this count going for it is the fact that the 60 and daily MACD histos are pointing toward zero and a signal line cross down is very close.

One should also keep in mind that this leg off 10/4 may still be working off a very extended wave 3.

Anyway, I think we will know within 2 days though.

(10:00 PM Update)

I wanted to add an alternate option to my 60 min chart above. It is possible that wave v red is working out an ending diagonal since we have seen a series of 3 wave structures.

If this is the case, wave iv red ended at 1122.79, wave 1 of the ED where I have [B], wave 2 at [C] and wave 3 of the ED complete or just about complete.

Wave 4 of the ED would retrace 3 by a proper Fib amount which would be near 1150 +/- points before the final 5th wave thrust higher. This could work out well with a thrust out of the ED on the Friday employment report.

The blue Fib retracement levels on the chart assumes that wave v red ends at 1173. This option is out if we rally immediately tomorrow and break above 1166.24 because wave 3 of the ED will be larger than wave 1 which is a no-no.

So just something to think about and keep an eye on.

(7:50 PM Update)

EOD - 60 MIN


As promised, this is my attempt to count this little mess. If this is correct, minuette (i) may have completed today.

As the 60 min chart at the top shows, MACD may be setting up for a sell signal, granted it started turning up near the close and the 15 min signaled a buy into the close. If it breaks below, that may be our confirmation that minuette (ii) is underway or if you hold a more bearish view, an intermediate top has been put in.

Take a look at my 3 min chart. I think it's a pretty decent attempt.

Based on the 3 min view, the final fifth of this leg up may have truncated. The pullback we experienced today may be setting up the following:

1) A 5 wave down (4 so far and the iv being quite wide)

2) A nested 1-2 situation

3) We are still working on a wave iv pink correction with waves w and x completed for that iv.

As always I welcome any constructive feedback.
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