Wednesday, October 15, 2014

10/15/14 - EOD Update

[1:56 PM Update] - Adding the 1 min chart. So far, looks like five waves up off the day's low.

1:56 PM - 1 Min

[EOD Update] - What a wild day. Nimble traders made some money.

The bear's formula of selling all rallies appears to be working over the past several days. If the bulls want to stop the bleeding, today was their chance to do so. 

I have several options (three) on the 5 min chart. 

Blue - Favors the bulls and calls for a completed zigzag. On the daily, this equates to a completed wave w or possible larger degree wave a of a larger flat or triangle for wave (4). 

Red - Continues to subdivide with an extended wave that will take on a 13 wave count from wave {ii red. 

Purple - A variation of red that also is looking for subdivisions down. 

5 Min 
On the 60 min below, the third leg down hit 1.618* the first nearly perfect before the bounce. Note the purple lines, so far this is only three waves down. The bulls need to clear 1926.03 to create an overlap into the first wave.

60 Min 

On the daily below, I tweeted earlier that a massive hammer may form and that is what the bulls created. Note that the retracement also has entered the territory of the previous wave 4, which I had labeled as a triangle.

So if the market is truly in a wave (4), price-wise, the level has been met. There is room to trade down to 1815 though.

Time-wise is another story. So what I'm speculating here, as posted in the AM, is that we may be trading in a range from 1825- 2020 over the next several weeks.

Wave (4) has the option to turn into a flat or a triangle, which would be a traders dream.

We'll see what the next few days brings. Sell the rallies or have we begun to trade in the 200 point range?
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