Tuesday, January 17, 2012

1/17/12 - EOD Update

Going into the weekend, I presented two primary counts. One was impulsive and the other corrective. I have since added a more bullish count to the mix but still tracking the impulse option below as the primary.

Today's new high obviously eliminated the "top is in" count option I added at EOD last week as well.

Even with the new high, the bulls did not take the ball and run with it. The bears stepped in and closed the market below 1300, printed a daily shooting star candlestick and the hourly MACD continues to negatively diverge with price.

The hourly MACD trendlines on the chart below will probably indicate which direction the market is headed one it breaks through.

SPX- Primary Impulse
Today's high would be considered the completion of wave 3 blue per this count. The pullback off the day's high may be labeled as wave w (or a if a flat is in the works). I believe a quick wave x bounce is in store early, which will then be followed by a wave y down to complete wave 4 blue near the lower yellow channel, which is at approximately 1287 ish.

SPX - Bullish Option
I'm going to insert this option ahead of the primary corrective below. I think this may still have an edge as the market continues to print higher lows and higher highs even with the reversals.

Depending upon how one counts the squiggles, today's intraday pullback may have just been a wave 4. (If you were following my tweets/intraday updates, I was tracking the pullback as a wave 4. See the 5 min below).

On the count above, I'm going to just slap and red 1 and 2 of 3 blue because of the steep retracement . So you can say with this count, the options are there are five waves up off wave 2 blue or wave 1 and 2 red of 3 blue completed today.

Either option would expect a push higher tomorrow.

SPX 5 min 
This was the 5 min chart I was posting through the morning. I was looking for a wave 4 to complete. I don't necessarily like the proportion of this wave 4 but it technically is still valid since it has not crossed back into 1 yet.

So this count still works of the bullish 60 min chart above.

SPX - Primary Corrective

This count was looking for the final push for wave (v) to complete the ED. If this is the case, the quadruple 60 min negative MACD divergence will probably follow through with a much deeper sell off than what most folks may be expecting.

SPX - ED Option
We must not forget about this option. Wave (iii) cannot exceed 1310.76 or it will be > wave (i)

So in summary,

The primary impulse count is looking for a wave x bounce early tomorrow before y drops to 1287.

The bullish option is looking for a rise to a new high for wave 5 red or a wave 3 red of 3 blue higher.

The corrective count has the top in as of today's 1303 high.

At the end of the day, there are too many counts looking for too many directions so with the continuing negative divergence, one should be cautious and nimble for trades.

Interesting that the VIX closed in green and above its 20 day SMA.
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