8/9/11 - EOD Update [9:32 PM Update]

[9:32 PM Update]

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Tonight, while looking at stats for my blog, I noticed that traffic was being driven from Elliott Wave Predictions . I have never seen this blog before but I am impressed.

So much so because today's post of the INDU is so close to my most recent bullish count that was eliminated due to the sell off. However, Sid's version of the count keeps that count alive and simply has a very short and truncated wave 5 vs the 146x target I was looking for.

I have updated that count in TOS and will now add it to the current count options. Keep in mind, though this is long term bullish, it is intermediate term bearish.

A proper Fib retracement may drop the market to 1015 or 933 or the 50% and 62% Fib retracements respectively .

One thing to keep in mind is that so far the market has bounced at the 38% retracement level as well. So we'll have to keep watch of that.

[9:21 PM Update]

Some other weekly MAs I'm watching.

Here's an H/S setup to go with that death cross.

[8:52 PM Update Death Cross Watch]

Let's keep an eye on this one. The last death cross last July did not pan out and neither did the head and shoulders pattern.

Well, the H/S panned out this time so will a cross mean anything this time? We shall see.

EOD Update

What a wild ride today. This bounce was way overdue.

The bulls shouldn't get all excited at the moment. There is a lot of ground to make up but this is a start for them. I wanted to see the market close above 1150 to maintain the bullish options.

Price finally closed back into the daily Bollinger Band and I believe the VIX also closed back inside as well after closing outside. We should be watching for a follow through tomorrow if the VIX buy signal is to be confirmed. This will require the VIX to close below today's closing price of 35.06.

Should this week close green, a weekly hammer candle will form and potentially above the 200 week SMA. I will update you all on this at the end of the week.

5 Min

I think this leg down is complete. Looks like the bounce off that low is a clean five waves up.

Where does it fit into the bigger picture? See below.

From the ultra bullish option standpoint, either wave ii is complete or wave 3 of c of ii.

From the corrective option standpoint either:

1. Wave b of Y

2. Wave 3 of a new impulse wave down.

This is the larger view of option 2 from above.

8/3/11 - EOD Update [10:05 PM Update]

[10:05 PM Update]

Here's an update to this chart I posted back on 7/2 along with the Elliott Wave Oscillator on 7/17. It's the same as the 5 Year Bull Chart I posted earlier via TOS.

I wanted to highlight the Fibonacci confluences again.

[9:54 PM Update]

Bounced right at the yellow 62% Fib fan. Hmm..

[9:37 PM Update]

Adding to the potential repeat of the failed H/S is the potential for a second daily positive MACD divergence. This may provide a clue as to whether or not a new high is coming.

I'll be watching this one carefully.

RUT- Daily

[9:00 PM Update]
Should we treat these as ascending triangles instead of the bearish head and shoulders?

EOD Update

The market pulled off a 25 pt reversal today and formed a hammer with a very long lower shadow. I say that's signaling that the market is at least due for a bounce. Perhaps target the 200 day SMA at the least?

Closing back above the 1250 level was also key in showing that the bottom of the 6 month range is still in play.

The first two charts below highlight counts that are looking for new highs to come.

The triangle is dead, however, I still believe the wave structure over the past 6 months has been a very complex corrective consolidating a trend that has been up for over 8 months.

If that is correct, the above count is one way of viewing it.

5 Year Bull

However, this chart has it in a wave 4 of a larger degree, which I think may be more applicable. This count is out if 1219.80 is breached below.


Though not an impulsive count, these corrective count options I have been following also allow for new highs to come.



Channels to watch.

This bearish head and shoulders pattern is being watched by all. This was the headline on CNBC right at the close. So now that everyone is watching this, will it play out or fail again like it did back in July of 2010?

Today's rally into the close may only be a backtest of the broken neckline. We'll have to see if it's rejected or gaps back over.

As of this writing, ES (SPX futures) is up approximately 5 pts. Should this be maintained, it should gap over into the open.

Here's the near term bear count. So far three waves down are complete or nearly complete. The wave 4 bounce will determine if there is a new impulse down. 1295 is the key to this. A rally back over 1295 will result in a wave 4 overlap into 1 and rule out the impulse down.

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.

10/20/10 EOD Update- Bullish Bias

EOD Update - Bullish Bias

I don't think the bears were expecting this today. The market remains bullish. Pullbacks may be expected but no crash (That's what puts are for anyway which I carry to hedge. Hey you can never be too sure).

I posted last night my reasoning for a bottom yesterday. The 5 min wave count, dollar and EUR/USD was signaling a wave 4 (degree up for interpretation) bottom.

There are still a few options on the table in terms of where we are at now.

SPX - 60 MIN

I can't say for certainty at the moment which count is my preferred. I list the 60 min above first because it has been my main one up until I started posting the EW Oscillator chart below.

This chart above has us working on minute [iv]. There are several options here for [iv].

It can be a flat, zigzag or triangle. So far, we have seen a three wave structure down, which I have labeled (A). Today's rally was a (B) wave up that may not be complete yet.

Based on this count, minute [iv] may be working on a flat. Given the size and time of [i], [ii] and [iii], [iv] will have to work on more time.

How does a wave correct with time? It moves sideways. How will it achieve this?

Possibly a combo corrective or triangle. On the count above, this initial (A)-(B)-(C) wave may only represent a wave W of [iv], which will then be followed by X and Y to complete it before we shoot higher.

Of course it doesn't have to only move sideways. It may drop further as well and a good target lower would be the 38.2% retracement. Notice where that falls? Just slightly above the minute [i] top. Certainly it doesn't have to drop that far but the retracement level should serve as a guide if we break 1155 and out of the range.

This count as it is labeled will be voided if [iv] drops below the top of [i] at 1129.24.

What has me a concerned about this count is the pink trendline which I continue to watch. Once again the market has gyrated around this line and has mainly stayed above. If it continues to respect this line, the EW Oscillator count below should provide another perspective, which is very bullish.

SPX - EW OSCILLATOR

I mentioned my concerns with the EW Oscillator count the other night, specifically with the way I had it previously labeled. See here.

The fact that (iii) was shorter than (i) bothered me. It's not a rule violation as long as (v) was shorter than (iii), but I didn't like it because if this is a wave (iii) of [iii], it should be at least equal to [i] if not longer.

I have since relabeled the degrees and now have it labeled as above. Now this is a pretty bullish labeling but I think this may work.

One cannot see it on the chart but (iii) would equal (i) at 1230. That's a pretty significant level since there is a significant Fibonacci confluence at that level as illustrated by the chart below.

SPX - Reverse Fibonacci Technique

Remember this chart? I posted this on 10/8, "A Road to 1228 Revisited" anticipating a move to the first confluence level. This initial level of 1183-1190 does not line up as significantly as the 1232 level but we hit it so it gives me confidence that 1232 is a very good target.

The odds, based on this technique, are very good that we go to 1232 because the four projections are stacked right on top of one another.

SPX FIB FAN

Another chart I have followed that gives me confidence in my analysis. Once we broke over the yellow fan on 10/8 the market found support there after yesterday's sell off. I forgot to post this chart last night as another reason we found a wave 4 bottom.

SPX - RANGE

The range is still in tact. We will know by the end of this week where it heads. Up and out or back down towards the bottom of the range. Place your bets.

The EUR/USD and /DX charts below are follow ups to the post last night. And the results are...

EUR/USD

The rally confirmed the turn/bottom of 4.

/DX

The dollar's sell off, confirmed that the most recent rally was a counter trend rally only. Looks like the dollar will continue to slide and if the inverse correlation to equities continues, the equities market should continue higher.

Ok. Sorry for the lengthy post. Of course, now that I have written all this, the market will crash tomorrow ;) I'm not betting on it though.

10/18/10 - Elliott Wave Oscillator

SPX - 60 Min

I came across the tradingfives website tonight and read their take on the Elliott Wave Oscillator. Check out their website for more on this.

I played around with the count using the oscillator and I think this may be a pretty good count. Based on this count, minuette (iii) of minute [iii] completed today.

Two things about this count that bug me are: 1. Minuette (iii) is only .618*a and 2. minuette (iii) so far doesn't look all that impulsive.

As I type this, SPX futures is down 6 pts. Perhaps minuette (iv) is in progress. We'll see.