2/6/10 - SPX Primary Count Alert

Primary Count


Primary Count Squiggles

Squiggles For a (green) of (ii) blue

H&S

Ok. I think wave (ii) of minute [iii] is in or very close to complete; more so than what most are expecting for (ii). But I don't think that really matters because (ii) is not expected to retrace very high.

Tonight I have flopped my counts from last night's post. I'm feeling pretty good about this count.

I went over the squiggles with a fine tooth comb and I think there is a pretty strong case for this. But once again the only issue I do have is the structure for a (green) of (ii) blue. I say it is a double zigzag for a (green). Please see third chart for closeup.

If I'm wrong, it counts as a five wave structure. But the counter argument to this is the fact that wave b(green) retraced beyond a (green) thus implying that it is a flat.

The a third option I see, but I won't lay it out just yet, is that this is the first 3 wave structure of a wave iv triangle. But if it is not, we are looking at the beginning of a (iii) of [iii], which would be a pretty massive drop. And if the alternate is in play, (ii) up does should not have that much to go.

According to my primary count, a max extension of wave c of (ii) would be 2.618xa at 1071.85. This corresponds well with a potential Head and Shoulders pattern developing. See last chart for this.

A hit of 1070 would create the right shoulder. This would also hit the center channel line before reversing lower. One other option to this H&S formation is that we do go range bound within the center and lower channel line as speculated in the third alternate count. This would create a more balanced right shoulder since the left shoulder appears to have three should peaks.

We should know by Monday.

1/22 - E-Mini AM Update

I don't know what happened to the data for the chart but my wave iii disappeared. Anyway the rest played out last night and so far it looks like the H&S target was met.

The way I'm counting it, this may only complete minuette (iii) with a minuette (iv) retrace back to the neckline (past support should be resistance now and it would make a nice 61.8% retrace). If the count is correct, it should not retrace past 1127.75 or we would have a 4-1 overlap. And if that were to happen, the case for my alternate count would grow.

By this count, minuette (iv) does not have to retrace back to the neckline either. It can also hit the minimum Fib retrace targets of 38.2, 50 and even 23.6.

If minuette (iv) does play out, we may possibly see sideways action for the rest of today, if minuette (iv) takes on a triangle formation.

1/21 - EOD UPDATE : Bearish Trend Change and Various Charts

1. E-Mini Bear Count

2. E-Mini Close Up


3. SPX Bear Count


4. SPX Close Up

5. An Interesting Thought


6. The Last Bullish Count


7. GS Bearish H&S

I think it is safe to say the Bears had this one today. I think it is also safe to say the E-mini H&S I posted on this AM followed through.

The first two charts above are of the E-mini. It appears (iii) is complete and wave (iv) is in progress.

The next two charts are my bearish counts for SPX. I show multiple trendline breaks and (iii) in progress or it is possibly done with (iv) in progress. This would correlate with E-mini quite well.

A bounce back up towards gap resistance and a backtest of the purple trendline looks like a likely spot. Once there, a final (v) lower should complete this first impulse (possibly minute [i])down.

The fifth chart is something I put together the other day. Read here for more. I'm gonna refer back to this from time-to-time over the next few weeks and see if it plays out.

Since my first post on this, we have made it down to the first neckline near 1114. This is a good stopping point because I believe this is the 50 day MA as well.

Next a correction towards the 1130 area would form the right shoulder and this would correspond well with a minute wave [ii]. So let's see how this plays out. I'm gonna label the posts regarding this chart as Bearish Head and Shoulders. You can follow this one specifically by clicking on the labels link to the right of the blog.

The 6th chart is the final bullish count that I have. If the SPX does not break below 1114.76, this move down may have completed a wave 4 flat. If this were to play out, a final minute [v] up would be expected. If the EW channels are correct, [v] would top near 1160. However, a break below 1114.76 and this count is out.

The last chart is of Goldman Sachs. I just had to post this one today because I had been following what I thought may be a Head and Shoulders formation. GS certainly pulled a reversal this AM after announcing positive earnings only to be sold on the news.

GS broke through it's neckline. Now let's see if there is any follow through. If so, 125 or so would be an expected target.

1/20 - E-Mini : The Bearish Count [4:50 AM UPDATE]

[4:50 AM UPDATE]


The right shoulder on that H&S is looking pretty good. The 1138 level has provided some resistance a few times now.

The options for this AM:

1. We are either setting up a 1-2, 1-2 with a 3 down at the open or...

2. Waves 'a' and 'b' completed with 'c' in progress or...

3. Waves i and ii completed and iii in progress.

I think option 2 and 3 are more likely at the moment.


You have seen my bullish count in the previous post for SPX. I now present my bearish count, which is represented by E-mini.

I have wave (ii) of [iii] working the retrace near the 61.8% retracement level. That makes for a good right shoulder if there is another H&S in play. This one may have a good chance of playing out.

I think at this point, 2 levels are key. Either 1148 is taken out and that will confirm a final minute [v] is in play or price breaks below the neckline in a convincing fashion. If the latter occurs, then I'd the case for the trend change would be pretty strong.

I think we may know no later by the end of this week.

1/18 - E-Mini Update : H&S In Play [1/19 - PreMarket Update]

[1/19 - PreMarket Update]

So far she looks to be following the chart I highlighted as a possible market path. Once price broke outside of the corrective channel, she head down towards the neckline.

Price broke through the neckline for (iii) and has sinced bounced to complete (iv). The channel down still looks intact. We will now have to see if (v) takes price back below the neckline again.














I'd say the H&S pattern I pointed out the other day is still in play. The bounce so far from last week appears to be a double zigzag/corrective. Price hit the 50% retracement level and has now broken out of the ascending channel.

Let's see what the market gives us tomorrow. The neckline below should be the first challenge at 1127. A break lower and we'll have to see if the H&S target will be met at 1110ish.

The last chart is one possible path I think we make if the count plays out.

One Large Flat??

One does not want to stretch the imagination but must always look for the alternatives (glass half full right?). Can a larger flat be developing?

As it stands right now halfway through the trading day, SPX has reached a pinnacle (at least for the time being).

On the 60 min chart, I count two sets of 3 subwaves. One for wave 'a' (931.92-869.32) and wave 'b' (869.32 to present). Currently wave 'b' has retraced 90% of 'a', which at this time qualifies it for a larger flat setup.

Of course one would only see (or like to see) this formation if one were to believe that the double ZZ starting from the 956 high is not quite yet complete.If this were to be a flat this would complete the double ZZ and take us back to approximately SPX 860.

With the formation of wave 'b', does this form the 2nd right shoulder and keep the H & S formation in play?

Is it possible? I guess we will have to wait for the market to tell us.