12/21/12 - EOD Update [Updated 12/22/12]

 [Updated 12/22/12] Commentary to follow later. Merry Christmas!

5 Min

As I mentioned in the update on 12/20 at 6PM, we must be prepared to be whipsawed solely on Fiscal Cliff news, which will render TA useless at the moment. However, having considered that, we will still try to guess :).

Short term, I'm keeping an eye on the wedge (pink) along with the blue count. Blue implies that wave (iii) is underway, which would line up with some type of positive fiscal cliff news over the weekend.

Note the structure counts best as a three wave (highlighted by the blue lines) structure since the 12/19 high and 12/20 high.

This implies that some form of complex corrective is working its way done. The red option provides room for one more dip lower for wave [c] of (y) should nothing occur over the weekend.

60 Min 

Daily

The market found support at the 13 day EMA along with horizontal support at 1422.

Weekly

I have posted this weekly chart for a bit now and the MACD histograms is still hinting at a Santa Rally for wave 5 of C. Some perspective on the 1422 support level is also highlighted here on the weekly.

Keep in mind wave 5 can always truncate as well and we will keep an eye on any breakdown out of the rising wedge.

We'll see what happens next week! MERRY CHRISTMAS to all who celebrate it and Happy Holidays to all others!