Thursday, January 6, 2011

1/6/10 - 7:30 AM Update

7:30 AM Update

3 min

Best guess at the moment.


Pre Market

/ES

Coming up to the top of the channel with a fairly clean five wave count. The Fibs represent the wave 1 expansion ratio for 5. .618 breaks out of the channel.

Option 1

Should futures maintain the higher bias at the open, I'm carefully watching the mid channel on the chart above. Tagging this would complete a five wave move up to 1280ish in what would be five waves up since the end of November.

It would be safe to assume that the chances that this leg is complete or near completion at this level based on the wave count and the channeling on ES as well as the larger channel below.

Note I have presented the channel below for quite some time and the top tag would be 1290. Not calling a top here (because I'm still unsure what sorta top it would be if it were one) but saying that this rally leg since November may be coming to an end.

Whether it just represents the first wave of another larger five wave move up or the actual "top", we'll just have to see how a retracement or sell off plays out.






But after having said all that, keep in mind the wave 3 extension alternate may still apply even if the market gaps up at open to 1280 and then pulls back. The red Fibs represent the max and target range for wave b of (iv) green. 1284ish would be the maximum to still consider an expanded flat scenario.
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