Tuesday, November 30, 2010

11/30/10 EOD Update

EOD Update

It's been a hectic day today at work. I'm wiped so I only have energy to post two charts tonight (maybe I'll get a second wind and post more later but no guarantees).

We continue to find support at 1173 and form corrective waves up and down.

Option 1b

This stood out at me today after taking a step back from all the mess. I think this may be a pretty decent possibility. If minute [c] is forming an ending diagonal, it appears it is missing it's fifth subwave down.

So I'll definitely be keeping my eye on this count.

Option 1c

Here is option 1c again. I made a few adjustments to the labels but nothing significant. If this option is playing out, I'm looking for the completion of wave c/y of minute [b].

I'm thinking that minute [b] is just going to be a flat here so a test of 1200-1204ish would be in order before minute [c] down starts.

I still have a few other options in mind but will not post those charts unless it becomes pretty evident that they are playing out.

Monday, November 29, 2010

11/29/10 - EOD Update #2 [9:35 PM /ES Update]

[9:35 PM /ES Update]


What is /ES telling us? I have two counts up. Unfortunately there is no clarity.

Either a minute [b] descending triangle is forming, with minute [c] down to come or a Minor 4 triangle completed and Minor 5 up is underway.

EOD Update #2
Here are some charts as promised. Still way too many options since we have a series of corrective three wave structures. I am only sharing the ones I think are most relevant at the moment.

As mentioned earlier, we are range bound between 1200 and 1173. Until we get a decisive break, anything is fair game.

Trading this range may be the easiest thing to do until there is a decisive break.

Option 1a

This option was probably the only option that really didn't have to change other than drag subminuette b red down to today's low, which implies that minuette (y) of minute [b] is working on an expanded flat.

Based on this count, 1206 looks to be a decent target. Subminuette c red of (y) also = 1.618* subminuette a red of (y).

Option 1c

I still like this option as well. Sort of the same implications, higher towards 1206 but in a three wave [A]-[B]-[C] structure. Those who didn't get long at the bottom today may have an opportunity to scalp a [B] wave pullback and ride [C] up.

And if the count is wrong an is actually more bullish, then a nice surprise may be in store. I don't think [A] is complete yet. It may only be in its third wave up so we'll have to see how this plays out tomorrow.

Daily Bollinger Bands

Looks like the market bounced at the lower band and more importantly, I have been watching the daily MACD trendline.

I was speculating whether Minor 4 would end on this trendline before Minor 5 resumed it's move up. We'll have to be mindful of this scenario and see if this trendline holds.

Minute [b] Descending Triangle Option

There is still a chance that this is turning into a descending triangle for minute [b]. The subwaves may be a little premature but if this scenario plays out, lower highs will be made and a few more tests of 1173 will occur before the market breaks down.

A move above (a) green and the descending triangle option is out.

Head and Shoulders Option

Here is the more bearish scenario. I do find an issue with labeling today's decline as a wave 1 blue down. The internal subwaves (squiggles) looks more corrective to me at the smaller timeframes (1-5 minutes).

However, if looking at the structure on the hourly, one can make a case for this structure. The bears will have to sell the neckline or the bulls will have to buy up the beginning of wave 1 blue to void this option.

11/29/10 EOD Update

EOD Update

I won't be able to post charts until later tonight. Not much to add by way of counts that I'm watching.

Option 1c and the minute [b] descending triangle look to me as the best options at the moment.

One minor tweak to option 1c that I see is that minute [b] maybe forming a combo corrective. So instead of the subminutte wave a red label where it is now, I may replace [B] black with red wave w and today's bottom marked the end on an X wave.

Today's rally marked the beginning of subminuette wave y up. Subminuette wave y would take on a three wave structure, i.e 5-3-5.

At the moment we are clearly range bound between 1200 and 1173.
Option 1c

Option 1c as posted last night is out. This is the alternative.

However, the more bearish count has now gained momentum.

Minute [b] Flat or Descending Triangle?

The minute [b] triangle I presented last last is out and a flat is more appropriate. Though a descending triangle is still not out of the picture if 1173 holds as support.

Sunday, November 28, 2010

11/28/10 [EDIT: Option 1c Added Below]

[EDIT: Option 1c Added Below]

Here a just a few options I'm watching as the week starts.

It should be noted that the dollar futures, weekly, ended on a bullish MACD cross last week. The wave 4 of a new impulse down was ruled out once 80.17 was crossed.

Should the inverse relationship of the dollar to equities continue, then this may support the minute [b] triangle option below. Should the dollar and equities rally in tandem, options 1a and b may provide some guidance as to how this will occur.




I like option 1c. It plays off the first five waves up off minute [a] and would fool pattern followers who think a bearish flag is forming. Will definitely keep an eye on this one.



It is possible the dollar may be in corrective mode going up. Here I have labeled it as an abc bounce but may also label it 1-2-3. The corrective option implies that this may be an X wave bounce. We shall see though since there is a weekly bull cross and a potential inverted head and shoulders formation potentially setting up.

Friday, November 26, 2010

11/26/10 - EOD Update

EOD Update

A short day today. I have a few chart options in my mind that support a bullish and bearish case. For a while there, the bearish case was probably 30% but I will say I'm leaning closer to 50/50 now.

I'll try to post those charts over the weekend. Let's just say I do see a potential nested 1-2 down for minute [c] if the chart below completed minute [b]. However, I am watching the minute [b] triangle as the higher probable case for the bears.

The bullish case isn't over yet either. Ultimately we will have to see what the market does with those pink trendlines below.

Near term, I think this is where the market is heading:

SPX - 3 Min

See the potential nested 1-2 down option? From the top of wave b/ii, I see five clear waves down which was followed by an ABC corrective up of approximately 62% to mark the end of wave 2 blue.

Basic EW analysis calls for at least five more waves down. If using some Fib projections, we see there is a confluence at 1182.

The red Fibs represent the extension of wave a/i black. If c/iii black = a/i black the market should target 1182.

The green Fibs represent the extension of wave 1 blue. If 3 blue = 1.618*1 blue, we see a confluence there at 1182.

Notice the bottom of the pink trendline also marks the wave c/iii expansion ratio of a/i by 1.27?

8:04 AM Update

The two charts above have to be emphasized here. One must be mindful of these options as well.

7:22 AM Update

Either subminuette iv turned into the expanded flat as suspected the other day in the alternate count or minute [b] is forming a triangle

Wednesday, November 24, 2010

11/24/10 EOD UPDATE #2 [EDIT 10:00 PM]

[EDIT 10:00 PM]
See the 10 min chart below.


Once again the 1177-1200 levels are key to watch. As you will see below, a bullish and bearish option still exists.


I start out with this chart. This has been my primary road mad for Minor 4. So far so good. I believe minuette (a) and (b) of minute [b] was in as of yesterday and today's rally was the beginning of minuette (c) of minute [b].

I show various targets for minute [b] based on the Fib relationships of (c) to (a).

(c) =(a) at approximately 1203
(c) -1.618*(a) at approximately 1220 (the top of my triangle trendline)

I don't have the alternate labels on this chart (they are on my option 1b chart though) but minuettes (a) and (b) may also represent minuettes (i) and (ii). Take a look at that option below. I didn't want to further crowd the chart out but something to be mindful of.


This option is right on track as well. Today's rally is part of minuette (c) or (iii). Notice that I have left open the possibility that the rally was only part of subminuette iii of (c) or (iii).

I will drill down the squiggles over the weekend. Based on my 10 min chart below I believe we may have seen all five waves up of (c) or (iii). Again. I'll take a closer examination over the weekend to see if the entire five wave structure may still be in progress.


Based on the 10 min chart, I believe the five wave structure was near completion with a final fifth wave ending diagonal (ED).

Within that ED, the final fifth completed subwave a. I would expect on Friday a small pullback representing subwave b of v and then a final thrust higher out of the trendline near 1203 or so.

As I stated above, I'll try to determine if this is only the completion of a third wave.

10 Min Option [EDIT 10:oo PM]

The initial 10 min chart above implies that an ending diagonal is forming at the top. The chart I have added here is a little different.

There are several three wave structures at the top and I believe that an alternate is the subminuette iv may still be in progress. Notice the ALT labels.

So the options here are:

1. A final ending diagonal is nearing completion for this rally leg
2. Subminuette v of minuette (c) completed waves micro [1] and [2] and began [3] into the close
3. Subminuette iv is still in progress and is working out a complex corrective.


One thing that favors the bears I believe is the fact that the market closed below the 20 SMA again. This action may support the chart below.


This option is certainly not out. The various Fib retracements and extensions still clearly support this count.

Say the 10 min chart above is correct and the rally leg ends at approximately 1203-1206 (a 62% retracement of wave A black BTW), that would support the completion of wave C blue as highlighted in the above chart.

That would satisfy the completion of wave B black, which would then be followed by a substantial drop in wave C black down to 1146 if C=A or 1111 if the H/S target is met along with C=1.618*A and a 62% retracement of the entire rally off the August lows.

11/24/10 -EOD Update - ED confirmed

EOD Update

10 Min

Cleaned up the 10 min chart to reflect the preferred count.

I believe that only subwave a of v black completed into the close. We may see a tiny little pullback wave b and then a final wave c of v black early monday to complete this ED.

Because wave iv black was a thr0w-under, I'm expecting wave v black to throw-over, which is typical following a throw-under at wave iv.

The other option I'm going to explore is if this only completes a wave 3 leg versus a complete five wave move off yesterday's bottom.

12:54 PM Update

12:40 PM Update
Triangle or ED??

Taking out wave a black confirms it was a triangle and the thrust was minimal but made a new high. That is all that is required.

However, notice that if the lower black trendline supports the pullback, the blue line traces out the potential ED.

12:25 PM Update

Tri breakout confirmed. 1202-1204 is the target.

12:00 PM Update
Keep in mind triangles tend to be drawn in too quickly so this may need some more time but does look fairly balanced.
11:30 AM Update
Opt 1b

Zooming out a little for some perspective. We are above the 1195 pivot.

11:25 AM Update

11:15 AM Update
This is the current count.
11:00 AM Update
Idealized Minor 4

Here's an update to this chart. The "or [b]" label sits near 1206 if (c)=(a) green. (c)=1.618*(a) right about where the top of the triangle is located.
10:50 AM Update

5 Min

9:29 AM Update
abc-x-abc option for minute [b]

This is a speculative call on a possible path for minute [b].
9:05 AM Update
3 min

This chart was presented in the chat room earlier. Please feel free to stop on in for more real time analysis.
8:04 AM Update
10 Min

If the triangle option for minute [b] is to apply, the market cannot break above the red horizontal line.

7:46 AM Update
Opt 1b

Cleaned up the chart a bit to highlight the potential target for minuette (c) of minute [b]. A 61.8% retracement of [a] takes the market to 1206. 1200 is also a viable target.

Notice the subminuette degree waves i/a, ii/b and iii/c may be readjusted to micro if this is the first five wave leg for subminuette i if the rally pushes higher.

7:35 AM Update

Opt 1b

1177 proved to be worthy of support yesterday. Though the bottom yesterday was a tad messy to count but I was more confident that this level would hold for a bounce.

The above count, though not perfect is the best explanation. Yes this is after the fact but that is what happens with EW every now and then.

I drew in triangle trendlines in pink above. That relates to the chart below and the other option I presented last night.

Opt Triangle

Tuesday, November 23, 2010

11/23/10 EOD Update

Minor 4 Idealized Structure

I added the triangle trend lines again. Not saying this is how it's going to happen but one way it can happen. Minute [b] may still retrace all of [a] and then lead into a combo corrective where minute [c] ends as an ending diagonal. Refer to this figure for an idea of what I'm referring to.

Ok. I lied. I added another option to keep in mind below. It is a minute [b] triangle option.
Option 1b

This is the primary count. I don't have time to update all the other options tonight so I'll just show this one and a few others.

The market held the 1177 level again. If you recall this is the end of minute [iv] of Minor 3. So far it's looking like good support.

The wave count may support an end to the leg down here as well.

The MACD histograms are sloping higher on the 30 min.

The one bearish formation I'm watching though is highlighted in the chart below.

Looks like a bearish pennant there. The market may want to re-test 1173, which would form a double bottom if it bounces there. This option also accommodates a move to the 1150s.

The market closed just slightly below the center channel. I have been keeping my eye on that MACD trendline support. I was speculating whether Minor 4 pulls back to this level and bounces.

We will see in the next few days.

Minute [b] triangle

A minute [b] triangle and then minute [c] down to the lower EW channel?

11/23/10 12:09 PM Update

12:09 PM Update
Option 2

I still believe Opt 1b is in play but we cannot discount the other options out there. If a descending triangle is forming, this may be one path and count to the 1150s.
8:55 AM Update
Option 1b

Notice I added an ALT: [a] label.
6:37 AM Update
Option 1b

This is the top count at the moment. Option 1 was ruled out. Option 1a may still apply but I believe 1b is the better count for now.
Pre Market

Three waves down so far. Is it a correction or the start of a new impulse wave down? We'll know soon.


The dollar is at the top of the channel looking like it wants to break out.