Tuesday, March 15, 2011

3/15/11 - EOD Update [3:58 PM Update]

[3:58 PM Update]

A Bear Flag?

EOD Update

When I challenged the market yesterday to gap down to fulfill a bearish count, it certainly listened. Though the market opened with a 35 pt drop, the resulting bounce retraced nearly 78% of the decline, which is pretty significant.

However, at the moment, there are still lower highs and lower lows, a close under the 50 day sma, daily MACD crossed below the zero line among other things. So it is safe to say that things are a little bearish.

However, with all that, I will still maintain minute [4] may have completed today as my primary count because it has not been ruled out yet and I still see a larger three wave structure down versus a larger degree impulse.

So until the 4-1 overlap occurs at 1227 and with a large degree five wave impulse, this count is valid.

This longer term channel was respected today and the daily candle printed a hammer.


Price also found support at the top of the base channel (blue) before bouncing. It is possible that the market may have put in wave (w) of [4] as well.

60 Min

Just a 60 min view.


ES paints a pretty decent wxy corrective and may be wedging.

APR Comparison

What may lend support to the bear case is the this chart should we see a repeat of April. A lower low obviously has now been printed and notice when the daily MACD crossed below the zero line in April it also printed a hammer candle. The market did the same thing today.

In April, a bounce with a lower high greater than 62% followed. Will certainly be watching for this in the ensuing days to confirm there is a repeat.

Here's the bearish option. Notice that this may still be used for the primary minute [4] count as well. As long as the mkt remains above 1227, it would be valid.

The problem I have with this count is that there are four nested 1-2s down. That gray 1 down, which represents the decline at the open, just does not seem to fit. It would be more appropriate to label it as a wave 3. The problem with that is the resulting bounce for wave 4 overlaps into 1.

So to me, something else is going on but we'll just leave it as is until a true invalidation is made. 1291.99 would be a start in ruling this count out.
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