Wednesday, May 18, 2011

5/18/11 - EOD Update [8:22 PM THE BEAR IS BACK!!]


A thanks goes out to Kenny from comments from yesterday's post. Earlier today I ruled out the bear count I posted yesterday. That count is out but the one above still shows a possible bearish count down.

However, keep in mind it assumes a triple nested 1-2 down, which again I think carries lower odds especially because the third wave 2 set is such a steep retrace. But again, it's still technically valid so we'll be able to rule it out should the market climb back over the 1351.05 level, which is the start of wave 1. This cannot happen per rule.

So just keep an eye on it but again not putting too much weight on it.

EOD Update

Today's bounce should not have been a surprise to anyone. (At least it wasn't for me based on the reasons I pointed out yesterday)

Did today's move make the count any clearer? Unfortunately not. We still have several options but no matter, we'll take them one leg at a time.

I'm still watching the Minor 5 Expanding Ending Diagonal and the Minor 4 Flat options. I have also added an additional count to ponder. 1350 may be the next stop before a decent size pullback is in store.

Things to keep in mind:

1. The market barely closed above the 13 EMA.
2. Still under the 20 day SMA
3. Coming up on the trendline from the 1370 high
4. Though the wave structure appeared choppy, a five wave impulse structure may be counted

5 Min

It's a little choppy but this may be a legit count. Notice I have an alternate label at the top there. Either it completed it's third wave or possibly all five waves complete. Both imply some type of pullback to come.

If a wave 4, then look for approximately a 38% retracement (1332)of wave 3. If all five waves are complete, then a pullback anywhere between 38-62% (1332-1327).

60 Min

Today I was watching for the MACD trendline (green) to break and it surely did along with the red trendline and is accelerating towards the zero line.

Look at the red channel. That may be the easiest thing to watch if you want to employ KISS.



ES will be testing this trendline overnight. Let's see if it succeeds or fails.

I think this fractal is complete.

This is the optional count I believe we need to keep an eye on .

This bearish impulse down count I presented yesterday is out. There is too much overlap going on. If somewhere were to show me a five wave down in progress on this current structure, I would have to say they are extremely bias to the downside.

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