Wednesday, November 10, 2010

11/10/10 - EOD Update [EDIT 10:20 PM]

[EDIT 10:20 PM]


I've updated the 1 min count above. The more I looked at it, the more I think it may work. Again I do caution that waves 1 and 2 at the bottom does look like little threes though.

But other than that, I like how there are three sharp 2s and three sideways 4s.

By this count, the market is working on the fifth wave up of what I believe may only be the first of five. This does support option 1 as posted at EOD below.

I'll probably drop this count if the market breaks below the channel.
[EDIT 8:50 PM]

SPX - 1 Min

Ok, this is an attempt to count the bounce off today's low as an impulse. (I know it has many problems)

I was looking at my hourly chart on TOS. The market has traded in a very nice channel over the last month.

Just looking at this chart, it appears that the market wants to head back towards the upper channel especially after testing the middle channel and closing above.

The hourly MACD bounced right on it's centerline and is aiming to cross it's signal line. Of course all that can change in a heartbeat.

[EDIT 3:08 PM]


Here is a 5 min view of the bounce off today's low. The count certainly favors option two below because the waves mainly appear to be corrective.

There are two potential inverse head and shoulders patterns playing out. The blue one was drawn during market hours when it peaked at 1215 at approximately 1:25 PM. The projected target there is approximately 1230. The second inverted head and shoulders was drawn at the close. It's target is approximately 1234.

As for the wave labels, the waves best count as a double zigzag. Waves A and B completed and a final wave C is expected towards the red Fibs to achieve a typical ratio to A.

Notice that wave C=1.168*A at the blue head and shoulders target. C=A at 1224 and hits the top of the channel perfectly.

I have labeled as an alternate (though I think this may be a stretch) of a possible wave (v) ending diagonal. That would support option 1 below.

EOD Update

The bears were not able to follow through with yesterday's selling today. In fact a nice daily reversal hammer formed. The market remained above the 13 day EMA as well and the trend appears to continue to be up.

I posted this chart last night. Low and behold we printed a hammer. That is too eerie. Coincidence or a repeat of the past? If a repeat, we may see a new high. We shall see..

SPX - 30 MIN

As for the EW count, the 30 min chart above highlights the current options I'm watching.

1. We printed (iv) at today's low and now working on (v) up.
  • The problem I have with this count is that the bounce off today's low does not look impulsive at all. On a 10-15 min interval, it appears as though we have five waves off the bottom but if one were to drill down the squiggles at the 1 min interval, it all looks overlapping.
2. We are currently in minute [iv] down. Today's low capped off the first zigzag down of a potential wave (a) of [iv] and the subsequent bounce may be (b) of [iv].

3. This option is very bullish and it considers the pullback today a wave (ii) of 5.

  • The problem with this chart is the same problem with option 1 above. The bounce off today's low looks too overlapping.

4. This option is not labeled on the chart because it is too early to tell but it could be the start of wave C down. See this chart for perspective.

Keep in mind that option 1 and 2 near term may move in the same direction and levels. Option 1 requires an impulse up to complete wave 5 in five waves. Option 2 can have wave (b) retrace all of (a) forming a flat so a new high can still be made. The difference lies in how it is made.

Option 1 again, requires an impulsive five wave structure. Option 2, if it retraces all of (a), will do it in an overlapping/stair-stepping fashion with as an a-b-c or w-x-y.

If we are in a minute [iv] down, remember that 1129.24 is key in keeping this count valid. I would also expect the market to trade within 1200-1220 or so +/- 5 points.


Perhaps the dollar has found a near term top? Up against resistance at 78.50 and it printed a shooting star candle.


EUR/USD may have found a floor near term as well. Sitting right on channel support and a possible completion of a wave 4.
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