Wednesday, December 15, 2010

12/15/10 EOD Update [EDIT 9:30 PM]

[EDIT 9:30 PM]

A Similar Pattern Shaping Up?

I just noticed a potential fractal/similar pattern at the top here. I compared the current structure off the recent top and the one off what many have labeled as the top of Minor 3.

The retracement of Minor 3was approx 28%. Notice what a 28% retracement of the 11/30 rally is? Right at support of the top of Minor 3.

So if these pattern is repeating, perhaps the market drops with a wave #10 down to 1226 before bouncing some more? Hmmm...

[EDIT 7:50 PM]

I forgot to include an alternate on the preferred chart and that is minute [i] topped and we are working on minute [ii] of Minor 5. Not in love with this count so much but something to consider.

EOD Update


The count as presented at EOD yesterday was invalidated today as 1234.71 was breached. However, as I mentioned early in the chat room, I was looking for 1240 and 1235 to provide some support all the while keeping an eye on the channel chart (see below). It appears that 1235, at the moment, may have just provided that support.

It has been obvious that the market has been very close to some form of a top and today's price action may have confirmed it further. The question still remains a top to what?

Here are a few bullish and bearish points:

Bullish:

1. Price support at 1235
2. Price support on the 25% channel line
3. Corrective waves down.

Bearish:

1. 60 Min negative divergence.
2. Daily MACD rolling over and will form a negative divergence.
3. Wave structure may be counted as complete
4. A nested 1-2 off the 12/13 top may be forming.
5. Shooting star candle from 12/13 confirmed

5 Min

I start off with this 5 min chart. I believe it may be counted as a leading diagonal down or a combination corrective. See figure below for the combination corrective.


Notice how the 5 min chart may resemble this figure above? That may be all of (iv).

Minor 4 Option

I am still split between this chart above and the one directly below (I made some adjustments to the chart below as I hinted yesterday of a top of a possible wave 3 occurring).

Given the fact that the daily MACD is starting to roll over, we must be ever more vigilante of this count.

Notice that minute [b] has now extended 138% of [a] as the candles suggest a possible turning point (shooting star confirmed)? This sets up the count above for a potential expanded flat or running triangle as I have speculated for a few weeks now.

I believe this option is still very valid since price never fully retraced towards the lower channel as a proper EW channel would indicate.

The mid-late Nov low that several analysts (myself included) have labeled as the end of Minor 4 never sat well with me because the "look" was not right and again, it never came close to the lower end of the channel. Hence, this is why I continued to post this option.

There is an argument that can be made for this option above based on the 5 min chart above and the combination corrective.

If there is more downside to come, a proper wave 4 retracement would be in the vicinity of a 38% retracement and near the previous wave 4 of the prior trend. In this case, 1220 fulfills both objectives.

Because the bearish points that I have listed above, I am a little suspect of this count but at the same time, I feel there is a corrective nature to the structure off the 12/13 top. If price respects the channel as highlighted in the chart below, this pullback may not drop below 1230-1235.


The market stop just shy of the 25% channel line.


Negative daily divergence building. The 20 day SMA has been rising and at today's close sits at 1211.
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