Thursday, August 11, 2011

8/11/11 - EOD Update [2:34 PM Update]

[2:34 PM Update]

This is for the benefit of those wondering what levels must be hit to rule out the bearish count. It's a long ways back but keep an eye out.

EOD Update

Today was one of those days where it was rewarding to see an EW structure hit a Fibonacci extension dead on.

Earlier in the chat room today, I posted a fib extension for what I believed to be a wave iii/c. I had iii/c = i/a at 1186.

Today's high was 1186.29 and reversed at that level. Now the big question is will wave iii/c extend 1.618* at 1228?

If you believe in the nested 1-2 i-ii count I present in the 15 min chart below, that may be the next target. However, if you believe today's rally capped off a wave c of 4 zigzag (again on the 15 min chart below), the 1186 was the top of this leg.

Primary Count

I am going with this count as my primary count. At the moment I'm trying to figure out if wave A green is complete or potentially the larger degree wave 2 blue.

Two options on the above chart. Either wave 4 green completed or a nested 1-2 i-ii up is in the works.

I will continue to watch the 200 week SMA. A flat close or green close tomorrow will print a weekly hammer candle. I think that will lend strength to my primary count if that occurs.

Death cross watch. The 50 day remains above just by a hair. Try by .20.

We must keep this count in mind. For now shorter term, this count is similar to one of the options on my primary bullish count. Both are looking for a wave 4 to complete before one final 5th down. Once that's complete, the bounce from there will be the key tell.
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