1/31/12 - EOD Update

The bulls reversed the bears yesterday and the bears returned the favor today. Short term, its still a little unclear where the market wants to go.

This is what I wrote in last Friday's EOD Update, "If the market is truly in a wave 4, prepare to see whipsaws in the market (think flats and triangles) until it completes since we may witnesses multiple corrective waves (three wave structures) up and down as the market consolidates the most recent gains. " 

I still believe the market is still trying to chop out a wave 4. The question is what degree. Please refer to my count options (primary, alternate 1 and alternate2) from yesterday's EOD post for the bigger picture.

As for the very near term my primary view is below on the 5 min.

One thing to note is the fact that the daily MACD crossed down today but the bulls got their golden cross.

SPX - 5 min 

Until this count is ruled out, we'll give it the benefit of the doubt. I'm looking for a wave iii green out of the gate tomorrow to help complete a larger degree 3rd wave that will either represent wave 3 of 5 or wave 3 of a larger degree B wave.

Please refer to the 30 min chart below for the near term scenarios if the market continue to chop.

SPX - 30 Min

Based on the three options available, 2 point higher to challenge 1320 at least. The third option is looking for a move below 1300. So long as 1300 holds, option red and green are the ones to watch.

SPX - 60 Min 

An hourly MACD buy signal confirmed and a close above the 20 SMA makes me think the flat/tri scenario may play out.

1/30/12 - EOD Update

I knew I should have left well alone when I posted the bullish 5 min chart yesterday. The bearish option I added to Friday's EOD post played out almost near perfect.

Today's drop even had wave 3/c nearly = 1/a. So far I see an attempt by the market to form five waves up and a more bullish option is the nested 1-2 up.

I still believe the market is continuing to chop out another wave 4 or completed another wave 4 at today's low. Its the degree of this wave 4 that is currently the challenge to identify.

Once again my 60 min primary, alternate 1 and alternate 2 still apply.

SPX 5 Min

Primary

Is wave 4 red complete?

Alternate 1

Is wave 4 blue complete?

Alternate 2

Is a flat playing out for wave 4?

1/29/12 - 5 Min Update

SPX - 5 Min

I just had a chance to look at the squiggles on my 5 min chart and notice there there are five legitimate waves up. So I have made my adjustment to this count.

I have the wave i high at 1314.43 and the wave iv low at 1314.4399 so there is technically no wave 4-1 overlap.

This count sets the market up for at least a third leg up to challenge at minimum 1325 even if this were to only be a corrective bounce up.

ES does not point to a bounce at the moment but there are several hours before the open. We shall see soon.

1/29/12 - Long Term DOW and SPX

DOW

Here's an updated look at the long term DOW chart I've been tracking. Anyone notice/mention the monthly MACD buy signal?

That may just be hinting that the move will either continue to hit the top of the expanding diagonal trendline or continue on in a new bull market to complete Grand Super Cycle 5.

Notice the mid channel is at approximately 14000.

SPX

Should the SPX follow.

1/27/12 - EOD Update - Golden Cross Imminent [5:42 PM Update]

[5:42 PM Update]

We must not forget about a move that is potentially more bearish.

SPX 3 Min

SPX - 60 Min H/S

EOD Update

The bulls have defended 1315 for a second day and continues to channel up. The primary 5 min chart shows the sell off from the 1/26 high as a corrective count.

I shuffled the primary and alternate counts I have been tracking and have reordered them below. Note they are all looking for a wave 4 to complete at various degrees. Currently the market's bounce off today's low was the beginning of wave b of 4.

I believe all three may have wave b retrace back to the 10/07 - 5/11 TL above.

If the market is truly in a wave 4, prepare to see whipsaws in the market (think flats and triangles) until it completes since we may witnesses multiple corrective waves (three wave structures) up and down as the market consolidates the most recent gains.

SPX -5 min

Primary

It is possible wave 4 red is a running flat. A new high next week will certainly confirm this option.

Alternate 1

Alternate 2

1/26/12 - EOD Update

Another late post for me. Last night I speculated that wave 3 was complete but that an over-throw could occur due to the 60 min MACD buy signal. Well, looks like that happened today.

SPX - Primary

I believe wave a of 4 most likely completed today and that wave b should be expected next to test the bottom of the channel.

SPX - Alternate

I like this as the alternate.

1/26/12 - Pre Market

SPX - 60 Min Alternate 2

Another gap at the open. We have to consider the extension possibilities until the up channel breaks.

Watching the red channel.

1/25/12 - EOD Update

Late post for me. The market reacted favorably to the FOMC announcement.

SPX - 60 Min Channel

Just this channel hit alone, coupled with a long term TL hit, would make you think this move is complete. However, what we have going now is a confirmed MACD buy signal, so we'll have to watch if there is some more upside to come near 1340.

SPX - Primary Option

The primary count may have wave 3 complete. This lines up well with the channel chart above. But again, one must keep in mind that the MACD buy signal may allow for a throw-over of the channel.

SPX - Alternate

The alternate, which I do like and may favor more than the primary, is looking for 3=1 at 1347. We shall see.

SPX - Corrective Option

The thing about EW is that though you may have some decent options to work with, you can also rule em out when they are no longer valid. Back to the primary and alternate cout and without fail, we will continue to look for the next alternate to work with.

1/25/12 - Pre Market [7:52 AM Update]

[7:52 AM Update]

All speculation but looking for a possible ED for this last corrective wave down or a (b) wave triangle before a final (c) wave down.

Pre Market

ES may be hinting at one pattern I'm watching my primary count to form

1/24/12 - EOD Update

With Apple's ER release and assuming the AH rally continues into the open, my primary and alternate counts are still looking pretty good.

SPX - 60 Min

Early at the open today I presented this chart and kept an eye on the mid - channel on the initial selling. It found support and slowly crawled up the rest of the day.

In keeping things simple, price is still heading up in the channel.

SPX - 5 Min

Once again this 5 min chart works with both the primary and alternate count. I'm expecting a minimum of one more push higher in either a wave c or wave iii.

We'll have to monitor the wave structure as it approaches the next logical Fibo retracement levels above.

SPX - Primary 

Based on this primary, I'm thinking wave 4 blue may be attempting to triangulate or form a flat. Either pattern requires a wave b retracement towards 62-90%.

SPX - Alternate

Based on this count, wave 4 red completed on today's early selling and bounced at the lower TL. Should tomorrow gap and go, that would be wave 3 (degree still TBD) up working towards completing wave 3 blue.

SPX - Corrective

This count is still legit and the bear's best hope is a nested 1-2 i-ii down started over the past two days. The only concern I have with this count is the fact that a drop out of a diagonal should be sharp and so far this has strugggled to find any acceleration down.

VIX - Daily

One thing the bears have going for them is the VIX equity sell signal was confirmed today with the higher close after closing back in the Bollinger Band.

Lets see what happens tomorrow into FOMC and the market's reaction to Apple.

1/24/12 - [7:51 AM Update]

[7:51 AM Update]

here is my 5 min view for today.

http://twitpic.com/8b66op

so far a 4-1 overlap so no new impulse down yet. this could have completed wave 4 red of my alternate

http://twitpic.com/8b62e6

and could have complete wave a of a flat or wave a of a triangle forming for 4 blue of my primary

http://twitpic.com/8b63ca

Pre Market

ES - 60 Min

 Backtesting the TL.

ES - 15 Min

MACD +ve divergence and taking on a falling wedge pattern.

1/23/12 - EOD Update [2:24 PM Update]

[2:24 PM Update]

Here's a StrategyDesk version of my corrective flat count based on the Primary daily chart. Notice that in order to qualify as a flat, wave B must retrace A by 90%.

A 90% retracement of wave A takes the market back to 1340, which so happens to be a Fib extension of 1.272 if [c]/[3] = 1.272*[a]/[1]. The market has already surpassed [c]/[3] = [a]/[1].

So lets keep an eye out for this count should the market continue to rally. Of course the bullish alternate is that this is in fact a wave [3] up of wave 3 green.

EOD Update

Unfortunately the near term wave counts were unclear into the close. See the 3 min chart below.

 The VIX just closed back inside its Bollinger Band so something to watch for tomorrow. However, the SPX did manage to crawl back over the trendline it has been riding above since Dec 21, 2011.

SPX - 3 Min

This count here supports both the primary and alternate options below.

If the primary is in play, wave a of 4 completed at today's low. The bounce thereafter, has done so and complete three waves up with c of b=a of b right into the close and hit the 62% retracement mark. Tomorrow we should then expect a drop down for wave c of 4 towards the 1305 level if c of 4 = a of 4.

Note the option I have on the primary. This could be a triangle in the works for wave 4 blue. Lets keep an eye on the lower Tri TL should there be a shallow drop tomorrow that does not take out today's low.

As for the alternate, which I have labeled Primary Option 2, today's drop completed wave 4 red and now wave 5 red of 3 blue is in progress with a gap and go tomorrow.

I can see wave 3 blue completing near the underside of the trendline (~1330) that started from 10/11/07.

SPX - Primary 

SPX- Alternate

VIX - Daily

Should the VIX close higher than today's close, an equity sell signal will be confirmed. I'm curious if the VIX will reverse sharply tomorrow because the daily MACD is on the verge of a cross down so I'm thinking this may still favor the alternate SPX count.

1/20/12 - EOD Update

SPX - Alternate

Haven't had time this weekend to add commentary to the charts but they should speak for themselves.

This is an alternate I'm watching should this wave continue to extend.

SPX- Primary 

SPX - 15 Min Primary

SPX Daily TL

INDU

VIX

Golden Cross

I haven't heard/read anyone mention the golden cross for the DJI. More importantly from a wave perspective, the DJI has now retraced the 5/11-10/11 leg down 90%.

This sets up the market for at least a flat if the more bullish scenario is not playing out. The DJI is leading my primary daily count , which I suspect is trying to do the same thing at minimum.

DOW  JONES

1/19/12 - EOD Update

My first target range  has been met at 1310-1315. Now it is up to the bears to smack this down or else this opens the door up to 1330-1340.

I'll be keeping an eye out for a wave 4 pull back. Some targets would be 1295 and 1282.

SPX - 5 Min

The majority of folks do not like to count the squiggles. I, on the other hand, enjoy it but sometimes you gotta just let the market run if it is extending. This is a very good possibility here should the market run for 1330. ** See the bullish option below for this extended count.

As of right now, I believe there are enough waves to complete wave 3 blue (see 60 min primary impulse below).

The pullback off the day's high is channeling lower but doing so in a corrective fashion. This would be consistent with what I'm expecting for a wave 4.

However, if a new high is made tomorrow, we'll just have to mark today's lil pull back as another wave 4 within a larger extending third wave.

SPX - 15 Min 

SPX - 60 Min - Primary Impulse

Wave 3 blue is complete or pretty close.

SPX - Bullish Option Alternate

This is something to consider should this leg extend higher. I believe this is a good count contender.

SPX - Primary Daily

Note the wave [c]/[3] target if it equals wave [a]\[1].

Why I think 1330 will be tagged if the market pushes past 1315.

SPX - Primary Corrective

The previous version of this ED count was ruled out today when the market climbed higher since wave (v) in that old count is longer than (iii).

This would be another version and will be voided if 1326 is breached since (v) would be > (iii).