11/30 - Dow

Here's a DOW chart I posted over a week ago. Based on the count, I assumed that the DOW completed a zigzag (A-B-C).

I made a slight adjustment here and have the DOW completing (C) at 10481.02 on 11/25. I now have last Friday's (11/27) sell off as a wave [i] (degree still up for interpretation) and wave [ii] in progress.

I like this potential count for the following reasons:

1. Intermediate wave (C) channels (blue trend channel) well with a Minor wave 5 throw-over.
2. Price broke down out of Minor wave 5's trend channel (in red) and back into Intermediate (C)'s trend channel (blue).
3. Fibonacci price and time targets (50%) as proposed by EWI have been met.
5. Minor wave 5 is approximately .618x Minor wave 1.
6. MACD cross on the daily (I don't have it charted here), which also occurred on SPX as well.

11/29 : E-Mini

This may be an a-b-c corrective in the works that will target the 78.6% retracement level at 1102. Wave c of this corrective is forming an ending diagonal with the 5th wave of the ED coming about. This would also target the top of the blue channel.

Note that a move to 1107 would also result in a backtest of previous trend channel (maroon). This would result in a 90% (approx) retracement.

The alternative is that this is a new impulse wave up. If so, I think this would be a subwave 'a' of b.

Let's see how this week unfolds.

11/27 : E-Minis

So far she's bounced off the July/Oct trendline (purple dotted) and is backtesting the neckline. The backtest of the neckline (green) is a 38.2% retracement of the current decline. 1088 = 50% and 1093 =61.8%.

11/26 - E-Mini : Trend Break

ES UPDATE (9:15 PST): Wow. She's selling off hard!


I think a break of the purple dotted trendline (July-October Low Trendline) will be very bad for the bulls. Some are calling this a triple top as well. If this is the case, the expected drop should be somewhere near 1054, which should be below this trendline.





Happy Thanksgiving to all. I didn't want to post anything for the rest of this week since I am enjoying my time with my family.

However, I could not resist posting my latest ES chart since the rest of the world has chosen to sell-off as a result of Dubai's issues

I made a slight change on the labeling since Monday's post but maintain that a Head and Shoulders formation is a valid one. As a result of the sell off, the neckline has been broken.

Now the question is will there be a follow through or will this just be a false break just like the previous H&S formation. Is this a wave iii or a (c)?

I think it is safe to say that we have at minimum a short term trend change on our hands. The level I'll be watching on Friday for SPX is 1070 (SPX). A break below will confirm the trend change.

11/23 - E-MInis

Today's ramp up may still count as a wave 2. Price could not stay above the mid-channel line.

I am still going with this count (applies to SPX as well). The red trend channel I drew shows price topping near the mid-channel line. A break below 1083.50 (1086.95 for SPX) would confirm the trend change.

I am expecting the next leg down near 1065 or so. This could either be a minuette (iii) or it may only be a minuette (c) of a larger flat. If it becomes a minuette (c), it could fool the bears with a false break of the neckline.

11/23 - E-Mini S&P 500

So much for the yellow band of resistance. I realized that the band's range should have been higher and right now the retrace is hovering near a 61.8% retracement, which may be forming the right shoulder of the H&S now.

I guess we'll see...GL!

11/22 - E-Mini S&P 500

Looks like the minis broke out of the channel. Will price be contained within the yellow band? I guess we'll see in a few hours.

11/20 - SPX : LD and 1-2s

I'm thinking the Leading Diagonal (started 1096 yesterday) is another wave 1 setting up a nested 1-2 combo with a minuette (iii) to come.

A break of 1096 invalidates this count.

11/20 - SPX AM UPDATE: DAILY MACD CROSS

UPDATE: (8:00 PST): MACD on the Daily has crossed. I expect a move to 1070 and/or possibly 1040 sometime next week.





Looks like this pattern I have been following is still in play. A cross on the MACD daily is just about to occur.

So regardless of the count, I say the likelihood of a pullback (either to 1070 or 1040) is greater right now then any attempts at a new high.

We'll see how today plays out and especially next week.

11/19 - DOW

Here's a possible count of the DOW. If P2 is strictly counted as a zigzag, Intermediate (C) may have topped with a minor wave 5 throw-over.

Minor 5 measures out to be just about .618x Minor 1 and price today dropped back into the trend channel.

Did we top? Still a long ways from finding out. I will definitely say this last leg up has certainly topped.

11/19 - SPX - H&S Finally?

What am I, 1 for 4 on the H&S call? Well I don't care. Gonna point this one out again as a possibility.

I think minuette (iv) is still playing out. I anticipate a completion either near 1100 but no more than 1105. Minuette (v) heads down towards 1085 to complete minute [i].

A bounce for minute [ii] takes her back towards 1105 to finish off the right shoulder. Minute [iii] takes flight and heads towards the lower trendline near 1060. 1060 is the expected target for the H&S. This would also fill the gap at 1070.

Of course an impulsive bounce off 1060 would make me question if this would be considered a minute [i] down.

But of course all this is getting way ahead. Let's just see what happens.

11/19 - SPX Update

This is one way (bearish) I'm counting this.

The alternative I like is posted by binve.

We will see how today plays out. Keep an eye on those trendlines that I drew in a previous post. 1070 and 1040 will be areas to watch as well.

11/17 - SPX : Intermediate (Y) or Minor A?

By this count, we are close to a completion of this leg up.

Three things line up here. Using Fibonacci ratios to predict the size of this final minuette (v) of minute [v], we see that ~1115-1116ish provides for equality between minuette (v) and minuette (i) and minute [v] and minute [i]. This level also caps off the move at the mid-line of the red trend channel as I was anticipating the past few posts.

We'll see what she does tomorrow...

11/16 - SPX Update

Remember this one?


It's pretty obvious this leg up was not a wave 2. I guess back to the drawing board.

Price is still respecting the mid-channel line (red channel) and now may be struggling with the mid-line on the second blue channel.

The third chart speaks for itself.

We are pretty close to the completion of this leg up. Is it just a Minor A of a final Intermediate (Y) or the top? I guess we'll see...

11/15 - SPX Channels

Just playing around with channels tonight. I have a blue channel starting from the beginning of the March rally and a red channel (began 8/7/09) marking the new trend outside of the blue.

The red circles mark points of resistance and the green are points of support. The latest resistance point rest at 1105.37 right at the 50% mark of the red trend channel.

Now the question remains, will price breakdown below the red channel line or will it rally into the end of the year? If it rallies into December, will price touch the upper red channel line and also result in a second backtest of the lower blue line? The first backtest of the lower blue trend channel line occurred on 10/21/09.

11/15 - SPX Sunday Update

10 Min

5 Min: A Closer Look

I just wanted to update my primary count and further label the subwaves. Unless I'm missing something (feedback is always welcomed here), this count from 1105.37 seems reasonable to me.

Additionally, instead of the 78.6% retracement of what I believe would be minuette (ii), I have highlighted a 61.8% retracement target for minuette (ii). I'm not ruling out the previous chart, just wanted to highlight this retracement level as well. In this case, subminuette wave 'c' of minuette (ii) equals .618 x subminuette 'a'.

This will be an interesting week...

11/13 - SPX PM UPDATE

SPX Count

SPX Histograms

SPX Alternate Bearish Count

Just gonna put this out for now as a potential bearish count setup heading into next week.

If the count is correct, subminuette 'c' of minuette (ii) would equal subminuette 'a' at approximately 1101. This would complete minuette (ii) at roughly a 78.6% retracement off the 1105 high.

Notice I also included subminuette 'c' = .618x subminuette 'a' at 1096 as a possibility as well. That would make minuette (ii) approximately a 50% retracement off the 1105 high.

The second chart is the histogram chart. Today's action printed yet another lower bar, further indicating a potential cross is in the works.

Since yesterday MACD reversed course slightly and may head a little higher. This may fit perfectly with the completion of minuette (ii) if MACD intends to touch the upper descending trendline before reversing lower in a minuette (iii).

Yesterday I commented on a possible shooting star confirmation. I like Cobra's take on the bearish reversal evening star formation even better. (Read here for more on the evening star). Either way, both mean the same potential, a reversal is in store.

The third chart is an alternate bearish count on the 1-2 setup. I say this count would work as well. Notice that where I have minuette (ii) labeled, price retraced an almost perfect 61.8% retracement from the 1105 high.

Of course next week is OPEX so we'll have to see how this may affect things. One thing to point out is that 1100 is still holding.

Have a great weekend!

11/12 - SPX: Weekly MACD Cross

While reading Dan's post tonight it made me think of my weekly SPX MACD chart. Dan commented on T-bone's Ending Diagonal count, which was referenced on Kenny's blog today.

As was posted by Dan, Ending Diagonals are usually followed by sharp reversals, usually back to where the ED started. So what would indicate a sharp reversal was in the works to back up T-bone's count?

I would imagine the above chart is unconventional or maybe not? For those familiar with this analysis, I previously highlighted the price behavior after a MACD cross (down) occurred.

Each cross is marked with a red line and a corresponding red line above on the price chart as a point of reference. What one should focus on is the candlestick that follows the cross. In this case, just to the right of the red line.

The comments on the chart details the weekly open, close and change in price for the week after the cross occurred. There have been five meaningful ones I have highlighted since 2/25/07.

As the chart shows, price pulled back an average of 4.4% after each cross down.

SPX is once again nearing a potential cross.

So what would this all mean? If T-bone's count is correct and a weekly MACD cross occurs, given this week's opening price of 1072.31, a 4.4% average decline would take SPX down to 1025 by next week. The caveat here rests on the fact that price must react the same way it did with the past five crosses.

Additionally, the histograms continue to print lower bars and continues to diverge from the MAs, so I would anticipate a cross is very near.

And perhaps T-bone's count is not correct or anyone else's for that matter. But could this cross still signal a 4.4% pull back to come regardless of where we are in the count?

Oh and I almost forgot to mention that a shooting star is in the works on the weekly as well.

I guess we will have to see how this all plays out...

11/12 - SPX: Shooting Star Confirmed?

Looks like a few things occurred today. I couldn't get access to total volume for the day but the down candle sure looks like it confirmed the shooting star.

In fact, today's candle may be considered a bearish engulfing candle? It is very close to completely engulfing yesterday's candle. It is off by .2 points to completely engulf.

SPX still could not close above 1100. A double top also appears to be forming.

Notice the MACD histograms once again. Today I have included both pivots labeled in red and green. Red indicating a cross down is about to occur and green indicating a cross up about to occur.

Today a lower histogram was printed after yesterday's peak. Could this be signaling another cross to the downside?

Obviously there are no guarantees here but this pattern has held up nicely since August with the exception of the one histogram that dipped on 10/29. Even with that little hiccup, the pattern ended up playing out as anticipated.

11/11 - SPX and Dow: Shooting Star?

SPX

DOW

I am not going to bother with a count again. There are several options out there and frankly all seem plausible.

Just going to work with my trendlines and adhoc TA. Perhaps we are seeing a shooting star on both the SPX and DOW. I say the SPX has a more pronounced star vs the DOW.

The DOW touched the new top trendline (blue) before pulling back and closing lower. Let's see if this becomes a new resistance level (for now).

The SPX has a little more to go before touching it's new upper trendline (blue). Notice if a touch of the upper trendline were to occur sometime tomorrow, it will mark the 1120 level. This is the 50% retracement level of the bear move from Oct 2007.

Let's see if we get confirmation of the shooting star tomorrow. A gap down will do it. The question is, what will cause the gap?

11/10 - SPX

This is all I have for tonight. If wave (c) of minute [ii] completed today, it extended a nice 1.618 x (a).

I think there is just a little more to go though if this count is correct. Subminuette v of minuette (c) has one final micro wave v to complete at just about 1096. Basically it will top near subminuette iii (red).

The bullish alternate would be that this is a minuette (iii) up and that P2 is not complete. If so, then refer to this chart posted yesterday.

11/9 - SPX : Histograms

Wow. I go away for a few days and what does the market do?

I'm too tired to count and analyze things right now. It appears many are stumped anyway.

Here's just a simple little chart I have been keeping an eye on. Except for that 1 rouge histogram on 10/30, all others were indicating a change in direction; UP in this case.

Now I'm wondering if the pattern is slowly losing momentum. A new upper trendline (light magenta) may be developing. As MACD heads towards it's descending trendline, will price also cap off at this new trendline near 1120?

Something to keep in mind. Will try to get a count out shortly.

11/5 - DOW : 61.8% Fibonacci Fan Revisited

Dow 10/15/09

Dow 11/5/09


Dow 11/5/09: A Closer Look

This will be my last post until next Monday since I will not have access to my charting software.

I posted the top chart on 10/15. (See post) . At the time, wave C appeared to count complete and channeled perfectly with wave 5 of C touching the top channel line as expected.

I plotted Fibonacci Fan lines and pointed out the 61.8% retracement level as a possible target.

Here we are 3 weeks later with an updated chart. Price kissed the 61.8% line and bounced off it and sold off towards the lower trend channel. In doing so, it also broke through the long term trendline from March to July.

From a bearish count, this leg down is considered to be a minute [i] of P3. Price has since retraced the move lower and is currently working on a minute [ii] wave.

This retracement is coinciding with a backtest of the long term March-July trendline and a second attempt at touching the 61.8% Fibonacci Fan line.

The question now is will these two different levels (long term trendline and 61.8% retracment line) hold price back?

I guess we may just get that answer tomorrow. GL to all and have a great weekend!

11/5 - SPX :ED?

EDIT: Oops. Should've also mentioned that this could be a wave iv triangle, which I think is correct. Will update the chart later.

An ED in the works here to complete this leg up?

11/5 - DOW and SPX Head and Shoulders

Dow 10/26/09

Dow 10/30/09

Dow 11/5/09

SPX 10/30/09

SPX 11/5/09

Remember these charts? Here's an updated one for today.

Keep an eye on the head. The pattern is starting to resemble it's old ways as posted here.(Refer to the third chart).

The Dow looks like it is going to paint a lower histogram today unless we see a sharp reversal, which given the past few days may be possible.

11/5 - SPX AM UPDATE: Wedging?

Wanted to post this chart real quick. How about a minute [ii] wedge? Not sure if I have this completely right from an EW standpoint but it surely is forming a wedge.

I see 1065 tops again.

11/4 - SPX MIDDAY UPDATE

EDIT: Just wanted to post this updated chart since the last one. Looks like a new wave subminuette i down is in progress. I will say for now 1061 is the top of this corrective minute [ii] or a wave '2' of some degree.


---------------


Are we there yet? Looks like subminuette v of minuette (c) of minute [ii] is cooperating thus far. Subminuette iv was just shy of the lower trend channel.

Off the 1061 high I see a potential LD wave 1 lead off on the 1 min chart. I will post this later if it shapes out to be this way.

If the top of this leg is not in yet, I will have to draw out new channel lines based on the new subminuette ii and iv waves (green) of minuette (c). Can't do it now because i have to run. Let's just say 1070s is possibly in the cards.

11/4 - SPX AM UPDATE

Here's one possible count. I have minuette (c) of minute [ii] in progress.

Subminuette iv of minuette (c) is tracing a possible zigzag. The gray EW Channels are in place.

If subminuette iv were to move as anticipated, 1047 looks like a good target. This would fill the gap, touch the lower channel line and re-challenge the purple trendline that was gaped through today.

Subminuette v would complete near 1062 and touch the upper trend channel and thus complete minute [ii].

All this would make for a nice 50% from 1101 - 1029.

The bullish alternate is that this may only be subminuette iii of minuette (a) of minute [ii].

Let's see what happens in 25 minutes...

11/3 - SPX Squiggles

15 Min

10 Min

5 Min

EDIT: Just wanted to add that the 10 day MA = 1057 and 50 day MA = 1052.

This is a bearish squiggle count, which I think counts well.

It can either be a zigzag (a-b-c) or double ZZ (w-x-y) for minute [ii] or (a) of minute [ii] or possibly just a wave 2 of a series of nested 1-2s. Either way they both mean the same thing at this point. For the sake of simplicity, I will refer to it as an a-b-c zigzag.

On all charts above, I have placed the Fibonacci scale for waves a blue, wave i (red) of c and wave i (green) of v(red) of c.

Notice on the 5 min chart, there is practically a Fibonacci confluence at 1047. The confluence occurs where:

- wave v(red) of c = 1.618 x wave i(red) of c AND
- wave v(green) of wave v(red) of c = 1.618 x wave i(green) of wave v(red) of c

If price were to retrace to this level, it would breach the upper trend channel (blue) ever so slightly but still remain below the purple trendline (8/17, 9/2 and 10/2 lower channel line). So this is one possible target.

Now take a look at the 15 min chart. If wave c(blue) = 1.618 x wave a(blue), price would tap 1057. 1057 would also coincide with the 38.2% retracement of price from the 1101 high to 1029 low.

Just some things to think about.