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.

SPX- The Preferred Count

Based on this interpretation I would have to say that this would be considered the best count(preferred count) with the triangle potential as one alternate.

What I have labeled here is a zigzag. I believe many others have this same view.

Adding the channel lines provides a look at where wave c may potentially end up. Wave c, according to Elliot Wave Principle Forecasting Guidlines, will touch the upper channel line that is parallel to the lower channel line that connects the beginning of wave a and end of wave b.

The Fibonacci relationship where c=a places wave c near 890. c=1.618xa=903

Based on the present structure, the channel lines and wave c's relationship to 'a', I would venture to guess that wave 'c' will strongly be attracted to 890 (+/- 5 pts).


Once this is complete, do we head lower or do we see a second zigzag for 'c' of B2? I say we go lower. The 888-890 level previously acted as support and was back tested once on 7/9 before it was slapped down. I guess we are trying for a second time. We shall see.

**Note:

The one concern I do have that may affect this view is that of wave (ii) red of 'c'. In this view and my alternate view, wave (ii) red looks like a triangle. It is pretty choppy and at the 3 min and 1 min, it does look like a triangle.

Per EW Rules, wave 2 in an impulse (wave c always subdivides into an impulse or diagonal; EW rules for zigzags) always subdivides into a zigzag, flat or combination.

Per EW Guidelines, wave 2 is usually a zigzag or a zigzag combination.

So unless wave (ii) red is a combination, it violates the EW Rule for wave 2 and strays from the guidelines, which in turn may add weight to the alternate triangle view.

However, in the end, EW concedes that not all guidelines will be met. The structure that meets the largest number of guidelines should be considered the preferred count.

We will just have to see how the structure develops.