I'm finally back from vacation and just in time to see futures up 19 plus points in reaction to a debt limit agreement announcement today. I think many have been expecting this. It was all a matter of timing.

Primary

Since I have been on vacation, I haven't really had a chance to update my most recent primary count.

Prior to leaving on vacation, I had Minor 5 underway with the triangle option as the alternate. These counts still seem to apply with either last weeks low completing minute 2 of minor 5 or minute [e] of the triangle.

Tomorrow's gap up (assuming futures holds overnight) is either minute 3 of minor 5 or the thrust out of the tri. Both counts look for a new high above 1370 unless minor 5 truncates.

This weekly chart above is another count I presented not too long ago. It's somewhat similar to the primary count but the counts are based on a higher degree using Fib ratios off the March 2009 low. I'm still watching this, especially for it's corrective count as well.

7/21/11

I'm on vacation but wanted to post a few different charts I'm watching. My primary still has us in Minor 5 up. However, given a daily MACD buy signal and the weekly starting to hook up, we must consider the weekly chart I posted yesterday. I posted it again below.

Let's see if 1344 is near term resistance. It makes for a pretty clean 78% retracement off the wedge. For those who may consider it a Leading Diagonal (see 60 min chart), this would be the area to stop the bounce.

Minor 5 - Primary

Near term resistance?

Bullish Weekly

With MACD hooking up hard, we must consider this count option.

Non-Log

Watch these trendlines. The blue TL targets 1356.

Log

1356 is the target for the lower blue TL.

Cup and Handle

If the rim breaks, the target is approximately 1450.

60 Min

Notice the LD option there. 1344 is 78% retracement. If this is an LD, it may still represent wave a of [e] of my tri with this current rally wave b.

7/20/11 - Pre Market [5:44 AM Update]

[5:44 AM Update]

Weekly

I must remind folks of this more bullish count as well and that is the market is in the midst of a Minor 3 of Intermediate wave 5 up.

Pre Market

Looks like the market likes Apple's earnings and debt ceiling news. Nothing goes up forever though so I'm trying to figure out the end of this leg. Once it is complete, I believe it will cap the end of wave 1 of Minor 5.

Copper and the dollar may be hinting at it's end too. Below I also have an alternative count for ES. Per this alternate, the rally off the 7/18 low is a wave c of B.

If this is the case, this would be wave B of [e] of my daily triangle primary. That would imply one more leg down in a wave C towards 1290-1270.

We shall see.

But first things first, the market is set to gap higher so let's see what the cash market does near 1331-1333. My squiggle count from last night was looking for a push towards that area.

ES

Looking for the end of the wave 1.

ES Alternate

HG

4 hour negative divergence.

DX

On the verge of a bounce or breakdown.

7/19/11 - EOD Update [4:57 PM Update]

[4:57 PM Update]

5 Min

Earlier in the chat room I presented this count as an alternate but I believe this may work for an impulse count up.

Once all five waves are complete, I'd expect a 38-50% retracement towards the 1315-1313 level. This would make for a nice right shoulder of an inverted head and shoulders pattern.

EOD Update

The primary count is that wave 1 of Minor 5 is complete or near completion today. The alternate count is that a complex corrective wave up labeled W completed or is near completion today. This alternate assumes that an LD developed off the 1356 high.

If wave 1 is complete, I'll be looking for a pullback for wave 2 or possibly x. A decent spot to touch down may be 1315-1310.

An inverted head and shoulders bottom may be developing here if such a pullback occurs in the next day or two.

5 Min

60 Min

Daily Primary

7/19/11 - Pre Market [10:04 AM Update]

[10:04 AM Update]

5 min

I think this makes the most sense at the moment.

[7:06 AM Update]

5 min

To go along with the 6:47 roadmap

[6:47 AM Update]

This is my road map for this bounce.
[6:43 AM Update]

5 min

Pre Market

Here's a follow up to the ES chart I posted in the chat room last night. So far it is up against TL resistance. Should the +ve divergence play out along with the previous fractal, I'd expect a breakout which would then be followed by a retrace that may test near the recent low.

Here's a cleaned up version of the LD I presented in the chat room last night after initially posting it in the EOD update.

Obviously with the ES bounce set to occur, cash should bounce out of it's wedge. I have set some tentative targets for what may form an inverted head and shoulders. This is highly speculative of course but something I'll be looking for.

Copper broke out of it's triangle last night. Is that gonna be it for it? If solely using EW, triangles are formed near the end of a move. We shall see.

7/18/11 - EOD Update [4:33 PM Update: LD?]

[4:33 PM Update: LD?]

Here's a 15 min view and a count highlighting a possible LD vs the falling wedge count I have as the primary.

The difference here is if this is an LD, this would represent the first wave, designated as either 1/A, that is followed by a sharp wave 2/B bounce. That bounce may go as high as 78%.

However, once that bounce is complete, a third leg down would follow. Given the daily MACD sell signal today, we must remain mindful of this option.

Just like the falling wedge count below, there may be one more leg down before the market bounce up and out of the wedge.

Keep in mind this is not my primary, however, a very steep bounce would be considered a truncated 5th as some folks have proposed should Minor 5 be playing out but fall short of making a new high.

EOD Update

This wedge is either complete or very close to it. If it is not complete, today's bounce was wave b of e, which may have completed and began wave c into the close.

The bounce off today's low in no way looks impulsive so I may have to give more weight to the wave b bounce of e. Besides it also looks like a bear flag.

I'll try to examine the squiggles a little later should something indicate a more bullish bounce occurred off today's low.

ELLIOTT WAVE OSCILLATOR

Taking a look at this count again and applying the Elliott Wave Oscillator (5,35), it is possible that the oscillator is confirming the correct position for wave 3.

So far, MACD has peaked at what appears to be wave 3 and has since diverged (made lower highs), which is to be expected once the fifth wave completes. Just something else to think about.

Speculative Diamond Bottom and/or Cup and Handle

This past June I speculated that the market potentially was forming a diamond bottom. Whether or not the pattern was legit, a bottom had formed and a breakout occurred.

Recently I speculated that perhaps the same type of bottoming process was occurring and once again I'll call it a diamond bottom.

Should my most recent call for the pattern not play out, the above chart may be calling for a larger pattern to form over the next couple weeks.

I believe we will see a bounce this coming week. How high will help determine if the 7/13 pattern is correct (use the blue trendlines in the chart below) or if this new larger pattern may be playing.

I have also proposed this cup and handle pattern as well. The handle looks like it is complete, which also correlates well with my most recent 5 min corrective count.

I would assume if just using patterns here, there are a few (whether correctly identified and named or not) that point to this being a continuation pattern. We shall see here shortly.

7/15/11 - EOD Update [2:34 PM Update]

[2:34 PM Update]

I updated the hourly chart below.

EOD Update

A very good chance wave 4 of Minute 5 completed today and wave 5 of Minute began. If you were following the daily alternate, then wave [e] of Minor 4 completed.

The primary count is that the market is working on completing wave 5 of 5.

This would be the top alternate count should we see one more pullback early next week.

An hourly view with a few other options.

The 30 min positive MACD divergence is one of the reasons why I lean toward wave 4 of Minor 5/wave [e] of Minor 4 completing today.

Gotta run for now.

7/15/11 - Pre Market

Pre Market
ES appears as though it may be triangulating. I'll be watching the TLs. I do see a potential for an expanded flat there should it break out of the upper TL but would still imply one more leg down.

Below is a recap from yesterday's EOD Post.

If the above chart is not the correct count the options again below are:

1. Start wave 5 of Minor 5 up - Blue Labels

2. Wave 4 blue is a falling wedge and requires a bounce for wave 4 (really wave d) of the wedge

3. Start of a wave Y up

4. Complete wave 5 (which would be a small ED) of a larger degree wave 1/A down.

7/14/11 - EOD Update

EOD Update

Earlier this AM I presented a chart offering to route plans. Below is the updated result and it appears that the market followed the blue one nearly to a T.

So after retracing nearly 62% the market found resistance along the trendline (which I forgot to present on the chart) drawn using 7/7 and 7/13 highs.

Below is the cleaned up version of the chart. The move off the 7/7 high still appears to be corrective and I believe is nearly complete if not already complete.

So where do we go from here? Below is a chart (originally posted on Strategydesk) highlighting the next route options.

The wave structure still counts corrective and appears to be wedging and I believe it just about completed itself today. So what comes next? The options:

1. Start wave 5 of Minor 5 up - Blue Labels

2. Wave 4 blue is a falling wedge and requires a bounce for wave 4 (really wave d) of the wedge

3. Start of a wave Y up

4. Complete wave 5 (which would be a small ED) of a larger degree wave 1/A down.

I'll be watching that blue upper TL for signs of a breakout or rejection.

Daily Bollinger Bands

The market bounced right at the 20 day SMA but lost the 50 day once again.

7/14/11- Pre Market

Pre Market

ES

What I'll be watching for over the next few days.

15 Min

Upper = 1334

Mid = 1325

30 Min

Upper = 1333

Mid = 1323

60 Min

Upper = 1329

Mid = 1321

7/13/11 - EOD Update [9:04 PM Update]

[9:04 PM Update]

Still looks potentially bullish.

[5:49 PM Update]

Compare the SPX and RUT daily. I think they are tracking one another.

SPX- DAILY

RUT- DAILY

DIAMOND BOTTOM?

Look familiar? Remember back in late June I speculated on a similar pattern?



If you need to compare.

EOD Update

Looks like we got the bounce I was looking for today and a little bit more, along with the drop down to complete wave y. At least I believe it is complete at the moment. I'll need to look at the squiggles later to confirm.

I like how it makes the corrective structure more complete and even if you are counting the move down off the 7/7 high as a five wave structure, it appears as though there are five complete waves.

My primary however, has this completing wave 4 of Minor 5 and / or possibly wave [e]. As I previously mentioned, at this point, it doesn't really matter because both options are implying a bounce towards a new high to come, even if it's only slightly higher.

If one were to view this as five completed waves down, then one should expect at least a 38% retrace and perhaps a 50% rebound is in store.

Other things to note is the fact that the market closed back above the 50 day SMA and printed an inverted hammer candlestick. See the image at the bottom.

INVERTED HAMMER

From Stockcharts.com