12/31/10 EOD Update

A very boring day today and week for that matter. I wish I could say things became a little clearer after this week but it hasn't. In fact an additional option was added due to the potential triangle that may be forming.

As you'll see below, the options I have presented over the past few days and weeks are still on the table.

I would like to believe that next week we will have more clarity as traders return from the break and volume returns to the market.

Some quick bullish notes:

1. key support levels held
2. a consolidation pattern at the top is forming
3. no impulsive selling yet

One key bear note is the fact that the daily MACD signaled a sell today. Will have to watch the Minor 4 option chart below if the market intends to correct much deeper.

Alrighty. That is all. I just want to wish all my readers a very Happy New Year and see you all in 2011!!

Option 1

Wave 5 Extension Option

Triangle Option

Minor 4 Option

12/31/10

It appears some type of triangle is playing out. I have leg d of the tri in progress and wave c=a of d at 1262.

A running flat may also be in the works too.

Hmmm. Has The Market Topped?

I have posted this chart a few times in the past as well. I just updated this tonight while looking for similarities/fractals.

IT sure looks like it is on it's last leg of the fractal. The only problem is we don't know if it has completed or will soon.


Here's a Strategy Desk version of the top chart. It looks a little cleaner here and I was trying to playing around with some Fibonacci math to see if it may provide some clues.

The only thing I found of interest aside from the fractals themselves are the wave extensions out of the last swing low, which I have labeled wave A above. Notice that both wave Bs extended 161.8% of the Wave As?

Certainly makes you go hmmmm...

But with all top and bottom calls, we don't know for sure what this may be the top of if it is the top.

Just found this all interesting and thought I'd share like my mommy has always told me to.

12/29/10 -9:30 PM Update

9:30 PM Update

Cup and Handle

Sometimes I think I have too many charts because I just never get around to viewing them all. Jim in comments tonight provided a link to his count and got me to look at the overall count again.

So I post this cup and handle chart once again. If Jim's count is correct, and based on the daily chart above, it certainly "looks" right, he may be on to something and it fits with this cup and handle chart.

Notice the green Fibs. Those represent extensions of Minor 1 green.

Now look at the .618 extension at 1246. That may be the target for minute [iv].

Of course a proper 38% Fib retracement of that minute [iii] would lead the market to approximately 1228, which is a very significant support level (for those who have forgotten, this marks the 62% retracement of the entire Great Recession decline).



You have all seen this Fibonacci Confluence chart before using Fib extensions and the Reverse Fib Technique to project pivot points.


Look at this longer term one, which also shows a very tight confluence at 1300.



The market has cleared the 1257 level and again appears to be targeting the 61.8% Fib Fan at, you guessed it, 1290ish.


Haven't posted a Eur count in a bit but this one may work. Look at the bullish looking MACD.

I don't show the Fib extensions on the chart but Y=.618*W at the top of the green channel and of course Y=W where I have it placed on the chart.

EOD Update

I still believe the market intends to tag the 1270 and possibly 1290 level. Until 1246 gives, I'm going to assume it continues to work higher.

There are a few things near term to be mindful off, which may be signifying a larger correction is looming, but again, until 1246 is breached, we won't worry about just quite yet.

Option 1

This option is still my primary, though it is in jeopardy. I also made a slight adjustment to the count.

Notice where I point out a potential similarity in pattern?

I'm banking on this count to complete micro 2 of subminutte v right at the MACD trendline support before bouncing to start micro 3 up.

Extended 5th Option

This extended 5th option is still on the table as well. This option implies that a wave 4 blue pullback may be in store. Looking for a proper Fib retracement if this is the case. 1246.73 would be the max pullback though to avoid a 4-1 overlap.

Subminuette iv Flat Option

This option is looking for a wave iv pullback as well. The max here is 1243.63.

Minor 4 Option

Just a reminder of this option and this is my most bearish option near term. I do have more bearish options, but until the bears show up to the party, it's not worth posting at the moment.

However, if your interested in seeing my other thoughts, just click on the links at the top of the blog.

12/29/10 - [12:15 PM Update]

[12:15 PM Update]
Looks awfully familiar.

Pre Market

/ES

12/28/10 - EOD Update

EOD Update

I'll try to post more things later. This is all I have for now.


Are we there yet? Perhaps since the structure may count complete, but I still have this labeled as micro 1 of subminuette v. What would be the beginning of micro 3 started today as well but what I don't like is the choppiness of the structure, which is not characteristic of a wave 3.

Notice where the inverted head and shoulders pattern targets, right at the top of the channel. That also lines up with the top of the daily Bollinger Bands.


Wave 5 extension still in play.

Subminuette iv flat still in play.

The ending diagonal is still in play.

12/28/10 - 8:40 AM Update

8:40 AM Update

7:40 AM Update

This is my primary count. Wave 3 black of v red is underway

Pre Market

Watch MACD.

12/27/10 EOD Update

EOD Update

Option 1

Here is the primary count I'm watching. As mentioned in the chat room today, though this is the primary count, I still question Minor 4 is properly placed on the chart. However, the counts still work so we'll have to go with it.

Refer to the Minor 4 option here. This count will be in server jeopardy if the market pushes beyond 1261.

3 Min

Here's an internal count off the wave iv red low. I show a five wave count up.

Using option 1 above, once may surmise that this is the completion of wave v red (which would be truncated) or it only completed wave 1 of v red.

The structure may still count as a three wave corrective as well so we'll have to see how it plays out tomorrow.

Wave 5 Extension Option

This option is still on the table and based on the 30 and 60 min macd configuration, this is a pretty top option to watch.

Remember that the top daily Bollinger Band currently sits at approximately 1275

Using the Option1 count above, this may be an alternative for subminuette iv red, which, based on this option, may be forming a larger flat. If this option is playing out, a pullback to wave a would be expected.

ED Option

And let's throw this one in there for good measure. It looks like it could work.

12/27/10 [11:17 AM Update]

[11:17 AM Update]

3 Min

[9:03 AM Update]

ED Option

There is just too much chop going on up here so this is something I had been considering and will continue to watch.

5 Min

As long as wave i red holds, this count is still valid.

12/23/10 - EOD Update [5:39 PM Update]

[5:39 PM Update]

/ES

We still have a ways to go overnight but so far e-minis has broken down out of it's channel.

If following option1, a drop of approx 13 points would still be allowed if subminuette iv red is still in progress.

The same goes for the wave 5th extension option and lastly, the minor 4 option would require a sell off to begin.

Look for the 4-1 overlaps if the bullish options are to be ruled out. 1246 Looks like a potential area of support should we see a further sell off at the open tomorrow. It also lines up with this channel below:





EOD Update

Option 1

This was formerly labeled as option 1a but I just renamed it as option 1. This is the primary count I'm watching but I'm thinking the wave 5 extension option below is very likely.

Don't forget that I'm also keeping an eye on the 1290 target.

Option 1 with Wave 5 Extension Option

I believe this may be playing out. Let's see if 1265-1275 is reached first and then re-evaluate to see if this option may be applied.

Daily Bollinger Bands

1273 is the top of the Bollinger Band.

Minor 4 Option

This option is still on the table but also pushing the limits of probability. If this is to play out, the sell off needs to happen now..

Option 1B

This is a very unlikely option now given the extension of wave b/x red.

12/23/10 - [11:42 PM Update]

[11:42 PM Update]
Sorry, I mentioned this option in the chat room earlier but did not get a chance to post a chart here.
[8:49 AM Update]

If1255 holds (1250 max) as support, a scalp long may not be a bad play if the 5th wave ext count is playing out and the mkt wants to tag 1275-1290 IMHO. Due diligence as usual.

Wave counts aside, this looks like a bullish pennant

Pre Market

/ES

Based on yesterday's 1A chart, if wave iv red is not complete, I'm looking for a pullback to approximately 1255 before moving higher to complete wave v red.

A possible target for v red would be approximately 1265 where v=i.

Should the wave 5 extension scenario play out, the 1265 target would still apply but it would only mark the top of wave 3 blue.

And of course, should 1265/1260 mark a turn, the larger Minor 4 option detailed in yesterday's EOD post will also have to be considered. Keep in mind, based on this count, wave b/x red may already be complete. We can't get ahead here yet until we see what type of pullback occurs.

So at least in the near term, the 1260s is a potential target for all three options.

GL!

SPX 1290?? Or a top?

These three charts below seem to indicate the market may intend to hit this level.

Do we have a top? Got your attention again? We'll have to see. Check out the last chart below.









I may have posted this chart from time to time. I was just taking a look at it again and low and behold, the market is approaching another trendline and the structure appears to count complete.

What I find most interesting about this chart is how the trendlines are drawn. I first drew the top and bottom ones using the reaction highs and lows. I next attempted to bisect (eye-balling method) the expanding triangle. Notice how price taps and respects this trendline a few times.

Finally I further bisected the upper and lower expanding triangles and once again price appears to oscillate around these lines in a meaningful way. Hmmm....

12/22/10 - EOD Update

EOD Update

Option 1A

This is the count to watch at the moment. Notice the subtle difference between this count and the extended wave 5 extension count I have below. The count below is the alternate option for 1A.

Wave 5 Extension

See here again for a brief explanation of the Golden Section and how it applies to wave 5 extensions.

This is the internal count of option 1B, which was expecting a pullback to complete minuette (iv) of an expanded flat. This option IMHO is most likely ruled out since wave b/x has extended almost 200% of a/w. Per EW guidelines, the chances that this is turning into an expanded flat has diminished greatly once wave b extends beyond 1.618*a.

Here is the larger chart as posted at EOD yesterday.

Minor 4 Option

But before we give up on a larger pullback that could be in store, do ya'll remember this chart? I do, it still fits within the guidelines for an expanded flat, granted it is really pushing the limit here.

If this count is to remain on the radar, it will need to pullback starting tomorrow. What are the chances of that? The market will tell us tomorrow :)