Tuesday, December 7, 2010

12/7/10 EOD Update [EDIT9:50 PM]

[EDIT9:50 PM]

Remember these three charts above? I posted them on Saturday.

They may support the alternate for SPX.

[EDIT 7:19 PM See 1 min Bear Chart Below]

The market has pretty much achieved everything I was looking for to complete minute [i] of Minor 5 and a 1232 price objective. We had a few false calls on that initially (may be some room left) but the following charts show why I was targeting 1232 and why minute [i] most likely is now complete.

We start off with this chart. You may have seen me post this a few times.

Though we bounced around a bit before we got here, this technique kept the 1232 level on my mind. It worked for 1190 as well.

The market finally hit it's mark. This technique typically points out pivot points so this may corroborate the option 1b count below.

The daily Bollinger Band was another one I had been watching along with the daily MACD. The past few days I kept pointing to the top of the Bollinger Band which also targeted 1232.

We got there today and ended the day with a shooting star candle. This is a potentially bearish reversal candle 'IF' we see confirmation tomorrow.

Option 1b

Now we look at the wave structure and the counts, though we would like them to be easy, was filled with squiggles that continue to push higher.

This count above may be satisfactory.

[EDIT 7:19 PM- I added to the 1 Min chart below to reflect to top of minute [i] ]
1 Min - Bearish Count

Here's a 1 min view off today's top that may support the turn. Personally I think this structure looks better as a flat (see below for this version) but this is a count we must watch.

The red line is the line in the sand for this count. If the market by chance rallies above it, the case for a new impulse down will be out.


Now we look at /ES and it sports a very satisfactory count. A pop out of the triangle and then a pretty steep pullback, which is characteristic of the end of a move.

Notice though that it stopped right at the lower ascending trend line of that triangle. Will it bounce here? We'll see overnight.

Option 1c

Now we must turn our attention to some possible alternate counts. Option 1c is among those.

Something about the wave form from minuette (ii), around 11/30, tells me we may still be in (iii). The move at the top looks like a flat to me and possibly another wave 4.

I am unsure of the degree but something I am keeping a close eye on. I'm thinking the 1220 level may contain this pullback if this is what the market is intending to do.

1 Min

This is the corrective count version that I believe is a flat. If this is correct, it should be complete or very close to completing and I'm thinking 1220-1218 (maybe even 1216 at the lower 60 min Bollinger Band) may be the support level.

What may support that notion are the Fib fans above. You have all seen this chart before.

The market has respected these two guys for sometime and the market broke through the 50% fan on 12/3. A pull back to this fan would be at approximately 1218.
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