Tuesday, May 31, 2011

5/31/11 - EOD Update [4:10 PM Update]

[4:10 PM Update]

5 Min

I've added a 5 min squiggle count here. It's not the most satisfying count but we'll go with it for now since it "looks" decent on the 60 min chart as well.

Remember to just keep in the mind the fact that this could still very well be an a-b-c (again replace 1-2-3 accordingly) to form a larger degree wave w.

EOD Update

So far so good. Things appear to be playing according to the script. The Minor 4 chart remains the primary chart and count. One thing that will need to be consider is if Minor 5 is underway.

It's not overly important at this juncture whether it's a wave [d] in progress or the beginning of Minor 5.
60 Min

Looking for the first five waves up which either represents wave a of [d] or 1 of Minor 5. If the above count is correct, I expect wave 3 green to reach no greater than 1351 since wave 5 red can't be longer than wave 3 red.

One thing to keep in mind with this count. Though I label it 1-2-3 in green, it may easily be replaced with a-b-c and represent a larger degree wave w of a zigzag up for wave [d] of the triangle option. So just keep that in mind if you are trading this short term and want out before a pullback.

Minor 4 Option

Minor 5 ED

This is still a strong contender.

Bollinger Bands

Perhaps the top of the BB is a target?


This count, though technically not dead, is pretty much a dead deal IMVHO.

5/31/11 - Pre Market

Pre Market

ES held it's gains overnight so the market looks to gap pretty huge on this last day of May.

ES traded nearly perfect in it's new rising channel. The Inverted H/S target has been met so kept an eye on the extent of that run.

As for cash, my 60 min chart below is the count to watch along with the larger daily view. Since wave [c] would qualify as the complex subwave of the triangle, I'm looking for at least the first leg of a three wave leg for wave [d]. Wave [d] should not make a new high if the triangle is in play.

However, if this truly impulses up to new highs then we may consider this Minor 5 in progress.

Monday, May 30, 2011

5/30/11 -

8.5 hours to go. That inverted h/s looks to be playing out. The target there is approximately 1342.

So far a pretty decent break out of the descending channel. Let's keep an eye on the inv h/s target as well as that ascending trendline (blue).

Saturday, May 28, 2011

5/28/11 - EOW Update

EOW Update

I was able to do a little housekeeping on the charts and think I can finally rely on one chart for now. At least for now.

Minor 4 Option

My Minor 4 count has been the go to one. There are still 4 sub-options that I have ranked in order and color-coordinated.

Minor 5 Ending Diagonal

Here's something to think about. This is a chart I put together based on a count provided by Geno who currently posts at DinosETF. I took this count into consideration and applied the Golden Section technique.

According to EWI, "wave 4 often divides the price range of an impulse wave into the Golden Section. In such cases, the latter portion is .382 of the total distance when wave 5 is not extended and .618 when it is."

In this example, I am assuming W5 is extending and thus "the latter portion" is .618 of the entire structure. Should this technique prove to be valid, Minor 5 projects to 1433.

I'm not completely sure of all of this but the main reason why I posted this is because if one measures the length of wave 3 in this ED scenario, it's length projected from where I currently have wave 4 hits 1433 right on the money. So this may be something to consider along with other reasons that the 1400s has come up.


An illustration of a W4 dividing the structure into the Golden Section when W5 extends. See more from EWI on this here.


This was the bear count I had been tracking and is out as it is labeled due to Friday's little move higher. However, see the new one below. Bulls need to be aware of this one.

This is the most updated bear count and was brought to my attention by Andrew in the Chat room. This is the last chance effort for the bears near term.

Wave (2) is a running flat in this scenario so we have a nested (1)-(2) 1-2 down here. The next few days will be crucial.

Notice the two intersecting trendlines at 1337. Those could prove to be beneficial to this count. However, should the market rally out of the down channel and take out 1346.82, this count will be dead along with any longer term bearish count and further provide an edge to my Minor 4 options above.

Ok. That is probably it from me for the weekend.

I just want to take a brief moment to thank every military personnel, here in the US and anywhere else in the world, who currently serve and have served to provide the freedoms that we enjoy.

More importantly, I hope all of you take a moment over this Memorial Day weekend and pay tribute to those who have paid the ultimate sacrifice to provide us with these freedoms.

Thursday, May 26, 2011

5/26/11 - EOD Update [8:45 PM Update]

[8:45 PM Update]

SPX 5 Min

In the CiL today I speculated that the market was setting up a gap and go event for tomorrow. Here's a 5 min view of that setup.

So far ES is working towards that but it's a long way between now and 9:30 AM EST but we shall see in a about 9-10 hours.

[8:29 PM Update]


TF appears to be leading.


Let's see if ES hits the top of it's channel at 1333.

[4:45 PM Update]

Minor 4 Triangle Option

This is the top option. At the moment this best explains the corrective three wave structures we have been seeing.

I think [c] is done but the 60 min chart below shows that possibly one more touch lower is possible, however, as long at 1313 holds, we'll consider wave [c] complete.

ES, TF and the 60 Min chart clearly shows a new potential three wave move up that appears to be the beginnings of wave [d] so we will see.

The ES inverted head and shoulders appears to be on track.


Finally broke out of it's falling wedge and heading for the upper trendline. That looks like the beginning of a decent impulse. Granted at this point that's three waves up. 837 would make that third leg up equal to the first. If it extends 1.618*, it will equal 851.

Minor 4 Flat Option
Here's all the other sub-options for Minor 4 which also remain valid.

The Bear count is still valid but again I don't think the odds are in it's favor. I have added an addtl alt label that would make it a nested (1)-(2) 1-2 vs a triple 1-2 down.

EOD Update
60 Min

I think the market his attempting to tag either the green or red trendline above at minimum. More later.

5/26/11 - 9:52AM Update

9:52AM Update


Here's a version of TF with Fib extensions.
9:28 AM Update


With that hrly +ve MACD divergence and a fairly decent looking impulse wave up, I would bet that rut breaks out of that falling wedge.

Pre Market

Holding above the mid channel for now after the release of the GDP and initial claims data.

The left shoulder resides at 1310. A 62% retracement of yesterday's bounce is also also at 1310. So should we see a pullback here, let's see if this level means anything.

One thing I can see it doing is wedging it's way down the mid channel and complete a wave b of [d] of the triangle I have been proposing. Wave a of [d] was all of yesterday's bounce.

Wednesday, May 25, 2011

5/25/11- EOD Update [10:42 PM Update - ES Inverted Head and Shoulders?]

[10:42 PM Update - ES Inverted Head and Shoulders?]

Target for the inverted head and shoulders is approx 1342, which could just be back at the top of the channel.

EOD Update

Last night's positive MACD divergence in ES gave me some confidence that the market would make a move for the 50 SMA today.

As posted in pre-market today, I was expecting at least an 11 point swing for ES at the market open after it's initial pullback if the second leg up would equal the first. Not only did we see 11 points but actually 18 since the second leg expanded the first by 1.618*.


As I type this, ES is currently backtesting it's mid-channel, which it climbed over. We'll see what the reaction is overnight.

It's been good times with all the chop. It gives me more confidence in the Minor 4 scenario and it's suboptions.

The bulls still have their work cut out for them if they want to see new highs. Things that still need to be considered:

1. Market still withing the down channel
2. Still closed below the 50 day SMA
3. A bearish count remains in play

60 Min

Very possible this corrective move from 1370 has completed. One thing about today's bounce is we must give consideration to an expanded flat for wave b of (y).

Minor 4 Option

Minor 4 is still resolving itself and all the chop still leaves plenty of room for different options. I will say I favor this option the most at this point in time. We'll just have to keep watching.

Minor 4 Triangle

Minor 5 Expanding Ending Diagonal

I don't really like this option too much anymore but it hasn't been invalidated. Besides, it still implies the same thing as the Minor 4 option so we'll just keep watching this too.


This count also remains valid. Should the market push higher through that horizontal line, this count will most likely be invalidated.

5/25/11 - Pre Market

Pre Market
Last night I pointed out the possible +ve divergence developing and sure enough it did. That doesn't mean price can't go lower as you can see previously a quad diverg developed before a bounce.

ES appears to have developed five waves off the overnight low. So I would expect at least another leg up at minimum equal in length to this bounce which I believe is approximately 11 points.

However, given that there are wave counts that may consider this corrective move off the 1370 down as complete, it should be watched carefully.

Given this scenario, we should keep an eye on this count that was posted last night:

60 Min Corrective Option

Tuesday, May 24, 2011

5/24/11 - EOD Update [8:19 PM Update]

[8:19 PM Update]

Some selling in ES tonight. I was tracking a falling wedge which may have seen a throw-under to complete the wedge. However, we must be mindful of the market's continued path within the channel.

Looks like it may have reached near the bottom now. Watch MACD for +ve divergence building.

[3:30 PM Update]

60 Min Corrective Count

A few other options with this but I just leave it as is until the market tells me otherwise. One thing having me question that triangle b (blue) wave is the fact that MACD has turned up.

EOD Update

All the options I have been presenting are still valid. The market is still chopping up and down which leaves all these options open.

The market is still within the down channel and still closed below the 20 and 50 day SMA so near term the trend is down.

Been busy lately but will try to post some squiggles later.






Monday, May 23, 2011

5/23/11 - EOD Update [10:00 PM Update]

[10:00 PM Update]

Remember when I made the comparison with the two similar wedges? We now may be seeing a third for ES.

[5:38 PM Update]

1 Min

Here's a 1 min chart I posted in the chat room near the close. I see a potential for at least another zigzag up to complete a double zigzag off the day's low since the move down from the intraday high appears to be corrective.

The bullish alternate is a nested 1-2 setup.


As of this update, ES is bouncing slightly green off that lower trendline within that falling wedge.

EOD Update

Will be back with comments on these counts.