10/27/10 - Triangle Update

SPX - 5/23/10

SPX - 5/27/10

I'm reposting this triangle chart since I didn't have access to my StrategyDesk platform earlier when I posted the EOD update.

The top chart was posted on Saturday 5/23, Weekend Thoughts. When I posted that chart, I speculated on how we would arrive at this triangle.

I didn't get a chance to look at this exact chart at EOD and posted with TOS earlier tonight. Take a look at the end result. Coincidence? Man that's pretty cool.

Earlier I posted that [D] may retrace 61-81% of [C] but it can very well travel back to the beginning to form an ascending triangle as speculated in the first chart above.

Anyway. I know this post is redundant but wanted to stress that perhaps this is what the market wants to do.

I just wanted to add some channel support

4/4/10 - SPX E-Mini Sunday Night Update [4/5/10 AM Update]

And a channel.

Are we seeing a possible 1-2 1-2 setup here?

Here's a chart of the e-mini. The count represented here is more conservative than my preferred count in the cash. This count represents the barrier triangle option.

So far price has broken out of the overhead resistance level. The blue channel is an EW 2-4 channel that is used to project for minute [v].

A typical target for wave 5s within an EW channel is the mid line or the upper line of the channel, which is represented on the chart with the orange circles.

Notice that minute [v] =.618[i] at the upper line as well as the triangle thrust target.

We'll see what happens overnight.

4/2/10 - SPX TRIANGLE OPTIONS

Option 1

 Option 2

This is a continuation post from this AM. Just so there is no confusion, I have two options for the triangle count. I favor the top chart at the moment.

However, what this impending end represents is a whole different story. We'll work on addressing that once we find a top to this leg up.

4/2/10 - SPX EOD UPDATE : BARRIER TRIANGLE? [8:55 AM Update: Mini Included]

[8:55 AM Update: Mini Included]

Here is a chart of E-mini with the barrier adjustment. So far looks like it broke
above the upper resistance line.
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 SPX BARRIER TRIANGLE

I am reposting yesterday's EOD update here because I wanted to keep these charts together. It appears the jobs report may provide us with some more upside starting early next week, which is consistent with the count.

In my post yesterday, I presented a chart of the SPY, which depicted a possible ascending triangle or a barrier triangle in EW terms.  A discussion in the CiL with Humblestudent gave me the thought to present that count for the SPX. So thank you Humble for keeping me humble.


Again as I said in the previous post, even if the the sideways move is not counted as anEW triangle, the structure itself qualifies as an ascending triangle from a basic TA perspective. This is a continuation pattern so one must prepare for a higher probability that the next move will most likely be higher.  (See below for more information on ascending triangles)

My chart above depicts an adjustment to my previous triangle count but I think this fits better. Nothing has really changed. I think it just proves that this is most likely a triangle formation of some degree. Granted there may be some more sideways action if it is not complete, but it should be minimal and contained within the blue trendlines.

Minute [v] targets are still the same and the expected thrust has not changed.

  SPX MAIN OVERVIEW

SPX TRIANGLE BREAKOUT

SPX ALTERNATE COUNT

Well it looks like we got that triangle breakout as guesstimated last night. The very top chart is the main overview of the count. I like how price is contained within the channel. Minute [iv] looks like it is complete. Right on the lower channel line.

The second chart is the closeup of the triangle to complete minute [iv]. I made a slight adjustment from last night's post. I believe subwave (e) completed at the 1167.15 low. A subminuette i and ii wave have completed and iii began into the close.

The targets for minute [v] have not really changed. I'm watching for a 5 wave count up. The center channel line or top channel still look like great targets along with the thrust target near the 1208 area.

It is possible this formation may have more to go. If anything, this structure does look like an ascending triangle (see here for more), which is a continuation pattern. We have the minimum two equal tops and rising troughs. A chart of the SPY highlights this option below. Bottom line, that implies more upside to come.

Here again is an excerpt  from Elliott Wave Principle, 10th Ed., Pg 51, regarding triangles:

"In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle. Elliott used the word "thrust" in referring to this swift, short motive wave following a triangle. The thrust is usually an impulse but can be an ending diagonal. In powerful markets, there is no thrust, but instead a prolonged fifth wave. So if a fifth wave following a triangle pushes past a normal thrust measurement, it is signaling a likely protracted wave."

Keying in on the red text, we should expect a swift 5th wave up targeting the thrust projection. I will also be keeping an eye on an ending diagonal formation as well.

If there is no thrust but the market pushes price up past the thrust target, hold on because it may be signaling a protracted 5th wave.

The third chart at the top is an alternate count that I'm looking at along with the fact that this entire leg up from 1044.50 may only be Minor A of (Z).

Happy Easter everyone!