5/22/12 - EOD Update [4:39 PM Update]

[4:39 PM Update]

SPX - 5 MIN 

Here is another example of a possible EW trade setup. I updated the 3 min chart below to a 5 min chart and added some subtle changes to the count.

Note on the chart, should this wave not be five waves up representing a wave (1), it is still possible it may represent a wave (W) or (A).

Confirmation for the bullish setup comes with the break over the red line at 1319.82. The bullish count obviously invalidates below the 1291.98 low.


[2:25 PM Update] 

RUT - Daily

The bearish view of RUT.

 EOD Update

SPX - 3 Min 

This is the primary near term count that I have. The SPX bounced right at the 50% retracement and where c=1.618*a.

 If the bulls break the red horizontal line tomorrow, it becomes more likely that we should see a third leg higher.

If the first five waves up only represent a larger degree wave A., wave C = A at 1346, otherwise 3=1 at 1346 or 3=1.618*1 at 1369. 1369 makes for a nice backtest of the H/S neckline (see chart at the bottom)

Bear - 60 Min

Note how the bullish 3 min above would fit in with the green alt labels on the bear count? Bears must make a lower low to invalidate the near term 3 min count and complete 5 waves down for wave [3] for the bear count.

H/S 

4/24/12 EOD Update [4:00 PM Update]

[4:00 PM Update]

RUT

SPX - Channel

EOD Update

SPX - 15 Min

As I mentioned yesterday, green and black were top contenders. I had to adjust the pink count and am starting to question whether it will play out.

SPX is still below its 20 and 50 day SMA and any quick pop tomorrow may just be a back test of the bear flag. I have that somewhere near 1382.

However, if black and green are playing out, it is possible to consider five waves up in the works off yesterday's low. So if there is a quick pop tomorrow  towards 1382, that would complete five waves up. A pullback within the buy zone may offer such an opportunity should black and green be in the works. The logical stop would be below 1357.

This is not a recommendation to trade but yet an example of how to use EW to setup a trade given the various count scenarios.

ES

So far it appears the market may like AAPL's ER and as mentioned last night, ES may be hinting at the green option, which would also apply to the black option.

EOD Update

EOD Update

At the moment, I believe the market may possibly be setting up a few more days of corrective waves up and down if it chooses to remain in the triangle. I believe bulls and bears may be in store for more frustration since this corrective scenario sets up several different options as  you will see below.

Until price resolves out of the triangular trendline, one must be prepared for the potential whipsaw.

Anyone short into the weekend? Based on the primary and alternate count presented below, it may not be a bad risk reward based on the wave counts.

Primary 

The primary count above has wave X green complete. However, as mentioned above, there are still too many corrective scenarios here so we'll just need to watch this three waves at a time.

Some of these options are:

1. Wave X green turns into a triangle
2. Wave X green turns into a flat
3. Wave X green turns into a flat
4. Wave Y green is underway to the Fib targets shown on the chart.

Primary - TOS version

Just showing a 60 min version of the primary via TOS.

Alternate

Now here is the bearish option should a very bearish catalyst occur over the weekend ala Greece. The head and shoulders target lines up with a 1.618*1 wave 3 extension.

Daily Bollinger Bands

Some things to consider for the bear case is the fact that the daily MACD is trying to roll over. The bulls still have the 20 day SMA as support.

EOD Update [9:53PM Update]

[9:53PM Update]

Just playing around with the count and structure. This is an interesting one that counts legitimately. We'll see.

30 Min

60 Min

EOD Update

Yesterday's EOD Update is a good example when most of one's EW counts (primary and alternates) point in the same direction it's not a bad time to take a bet in that direction or maintain a position previously held.

Granted the counts alone were not the sole reason, I did point out the 30 and 60 min MACD setup as well.

Anyway, the market followed through and now we need to determine if wave iii is nearing completion on the primary or if wave (B) is complete for the alternate.

I eliminated alternate 2 so the counts are a little easier to manage again.

30 min- Primary

This count has the market stair stepping higher in the channel. Obviously pattern-wise that still fits as a bear flag so one must remain vigilant with that, especially since the alternate count below may have completed.

60 min - Primary

If you are wondering how the 30 min fits into this picture. The 60 m MACD looks like it wants to cross up through the zero line.

5 min - Alt1

It is very possible that an ED is forming up top to complete wave c of y of (B) or it is already complete.

VIX- Daily

The VIX managed to close above 30 and formed an inverted hammer right at the back test of the descending TL it recently broke out of.

The daily MACD buy signal was confirmed today, however must watch to see if this is short-lived especially with the close below the daily 20 SMA. (I forgot to correct this statement in yesterday's EOD. I wrote "sell signal" when it should have been "buy")

11/4/10 - 12:17 PM Update

12:17 PM

This may be one way to explain the corrective threes up.

11:41 AM

4 was a running flat. wave 5 of 5 of (iii) or (i) is underway. 1220-1230 target.

11:34AM Update

11:25 AM Update

I'm seeing a triangle for this wave 4.

10:35 AM Update

SPX - 3 Min

I'm leaving room for a wave (i) up of 5 for this current leg up. I would expect a steeper retracement if that is the case.

10:08 AM Update

SPX - 3 Min

Looks like wave (iii) is still in progress. Nice alternation between 2 and 4.

8:23 AM Update
Let's see what type of pullback we get. Watch the Fibs and the structure.
7:44 AM Update
For an intraday trade a good setup may be near. There is a clear five wave move up off the 1183.56 low. That could still be considered the beginning of this fifth wave up so this could only be wave 1 up of 5.

Either way, we have five waves up, we should see three down to approx 1202-1205 and that should be followed by five waves up. If it is a pretty clear corrective move down to those levels, a good risk-reward setup based on EW is in order.
7:15 AM Update

7:03 AM Update


This is how I'm counting this at the moment.
Pre Market - It's Not An ED



As of 6 AM PST, futures are up 11 points. If this were the wave 5 throw-over it has now exceeded wave 3 of the ED. Unless I'm missing a larger ED count, chances are we are in a wave 5/X/Y up out of a wave 4/B/X triangle.

1232 may be the target the market is heading for.

11/1/10 - EOD Update #2

SPX - 60 Min

Here's a recap of the 60 min chart again. I added an alternate label at today's bottom and will mark it as wave [C] should this turn out to be a complex corrective.

The preferred count at the moment is that we completed the triangle today. But until we take out 1196.14, the alternate is something to keep in mind.

Notice that the rise since 1091.15 on 9/7 has formed a very nice channel. Should the triangle thrust come through, a likely target may be the top of the channel. The blue line marks 11/3 and the intersection with the horizontal line and top of the channel is approximately 1220.

Perhaps, as I first speculated two weekends ago, we rally to this target on the heels of the election and FOMC meeting minutes.

SPX - 15 Min

Another look at the 15 min with the alternate label.

EUR/USD

The EUR/USD is still in it's triangle and perhaps completes e overnight and tomorrow.

CCI

This chart still concerns me. CCI is on the verge of crossing back up through 100 but will be met with the trendline resistance. When and if the triangle thrust occurs, will this trendline be broken or reject it the fourth time?

STRATEGY

For those still scratching their heads trying to figure out how to count the mess off the Aug lows, I have a more simpler approach.

Since the July low, we see three waves up. It may be counted as 1-2-3 (my preferred) or A-B-C or W-X-Y.

Since no one is too sure that the move off the Aug low is a true impulse five wave move, I say don't worry too much about it right now. In fact in the Elliott Wave Principle (EWP), Prechter says that if one cannot make sense of the form, step back and don't do anything and let the waves work themselves out until there is something more clear.

So using our current structure, we know that some type of triangle is forming. We know that triangles represent either a wave 4, B or Xs. We also know that triangles occur in a, "position prior to the final actionary wave in the pattern of one larger degree, i.e, as wave four in an impulse, wave B in an A-B-C, or the final wave X in a double or triple zigzag or combination."(EWP pg 51).

So based on the above, we know an end to this leg is most likely coming. What type of pullback we see will determine if the rally off the July low is a five wave impulse up vs an A-B-C or W-X-Y correction.

What level will determine this? Simple. 1129.24.

Should the market pullback and retrace below this level before we see a clear five waves up, the market will have confirmed that the rally off July was only a three wave correction.

That is it. So I say, until this level is taken out the impulse count up off the July low is still very valid.

10/28/10 11:20 AM Update

11:20 AM Update

Vodavi brought up a good point earlier this AM in comments regarding a complex wave [C] scenario. I certainly would not disagree with this possibility.

I still have as the preferred count at the moment that we are working on [D].

Until we get a decisive break above 1196.14 or below 1159.71 we should be whipsawing up and down to complete this triangle.



10:07 AM Update

Looks like we may have our break out of the falling wedge for wave b/x of [D].

Targets for this are c/y = a/w at 1195 and c/y=.618*a/w at 1189


9:42 AM Update
Had to step away for a sec. Looks like this may be a falling wedge. Consistent with a wave b or x of [D]

8:27 AM Update

An hourly MACD buy signal is imminent. The last time we had a cross from under zero was on 10/20. The market made two higher highs from there.

If this repeats, this may target the wave [B] high at 1195 and form the ascending triangle as I have mentioned a day or so ago.


8:05 AM Update

SPX- 5 MIN

Here's the 5 min view without the trendlines. MACD is heading up.


8:00 AM Update

SPX - 1 MIN

Here's a quick 1 min view to show the channel break on that retrace down. Either wave (x) is complete or wave a of (x) is complete.

7:35 AM Update

SPX - 5 MIN

So far a pause at the 50% retracement level in a three wave down. If this is still an (x) wave of [D], keep in mind that this wave (x) may be a triangle itself so we could potentially bounce around before one more spurt to the upside to complete [D].


7:20 AM Update

SPX - 5 MIN

Looks like wave [D] of the triangle may be in . Subwave c of [D] = 1.618*a of [D].

I did place a wave (w) at the top of [D] as an alternate because on the hourly chart, the move off [C] does not look like a clear three wave move up.

So we are either working on [E] down now or just (x) of [D].

Here is another example of an EW trade setup. Should we be working on [E] down, a move to 1180-1177 may be bought with a clearly defined stop (below wave [C] at 1171). If the count is correct, one may be able to ride a 20-25 pt move up when this thrusts out of the triangle.

6:50 AM EUR Update


EUR/USD appears to be working out a possible triangle as well. It should coincide with grinding it's way down towards the daily MACD trendline. It may not either and just create a higher low. We shall keep an eye on the histograms.

Pre Market


Here's a look at the futures market. So far the triangle is looking right on track. As I mentioned yesterday, it is possible that wave [D] travels as high as the end of [B] to form an ascending triangle.

The second chart is a closeup and shows the fib relationship of wave c to a of [D]. A .618 ratio gets up 1187 and 1193 if c=a.

Yesterday there was a discussion regarding my ED count in that wave 2 of the ED was not a zigzag (it was a flat), which per rule it should be. I mostly agreed with that argument and dropped the count.

However, I believe the market is still wedging higher and other indices may be sporting a legitimate ED. Ultimately if the market takes out wave [B] of the triangle, we may have to bring this option back to the table as a consideration.

GL today.

10/22/10 EOD Update- Trade Setup

EOD Update- Trade Setup


Well she sure took long enough. I believe we saw our pop out of the triangle into the close.

Targets that I have for this thrust all depend on what count is working out.

If wave y=.618 * w, I see 1188 as a good spot for wave (D) of the larger triangle.

If we are working on a wave 5 ending diagonal, y=w at 1193ish for wave (3) of the ED.

That is all I have for now. I'll take a look at the other charts I have (EW Oscillator and 60 min) to see what may be in play or not play there.

Have a great weekend!


12:20 PM Update- Trade Setup


She sure is taking her sweet ole time. I made some adjustments to the subwaves if this is still a triangle. EWP does state that triangles do need to take time and many analyst (yours truly included) often times draws them out too quickly.

My bet, which I still have, is that we pop into the close. Stop at 1178.




11:40 AM Update- Trade Setup



There is a remote possibility that we were only in a complex wave c corrective down to 1179.90, which is to be expected. Working on d up now and then a final little e.

Either way, we are close to finding out.

11:00 AM Update- Trade Setup

We are awfully close to violating the triangle. A break below 1178.99 would violate the triangle. However, this still counts as a corrective combination that still implies there should be a leg higher from here.

10:07 AM Update- Trade Setup

Looks like subwave e will end as a falling wedge/ending diagonal.

9:45 AM Update- Trade Setup


Here's an updated look. Sorry. Had to ditch StrategyDesk for now.

And the bigger picture.


9:15 AM Update- Trade Setup

Added long. I believe wave e is in or just about complete.

Sorry. The only chart I can post



8:48 AM Update- Trade Setup

Wave c of the tri may still be in progress or it is wave e. A break above wave b blue confirms the tri is done.

I think 1180 will hold before heading higher. Just keep an eye on waves a and b blue. Which one breaks first will be confirming the move.

Above b blue we go up. Below a and the tri is out.

I gotta run. Won't be posting for the next 1/2 hour or so.


8:37 AM Update- Trade Setup

SPX - 5 Min

Here's a potential trade setup for approximately 8-10 SPX points. I believe the x wave is forming a triangle.

The blue Fibs represent the projection for wave y of either (D) of the larger triangle or (3) of the ED option.

To confirm, let's make sure the waves continue to subdivide within the converging trendlines. A break below a blue and this scenario is out.

8:15 AM Update

SPX - 5 MIN

Here's a 5 min view


8:00 AM Update

SPX OPT 3

Here's an update to a few options I keep an eye on to keep things in perspective. I think we all agree this rally may be a little extended.

I don't want folks to think I'm all bull. The above chart is the best count I have going for the bear case. I speculated that a flat (possible expanded if we take out the April highs) may be developing.

So far, the structure fits the bill. Three waves down from the April high and three waves up since the July low.

Until we see a fourth and fifth wave print on this rally since July, this bear count remains very valid.

On the bulls side, however, that structure looks like another inverted head and shoulders with the neckline sitting at the April highs. I'm not sure how this fits into William O'neill's cup-and-handle formation either but that would be another bullish formation that may be forming.

The handle would be the pullback for wave 4 before the 5th wave breaks out above the 1200 resistance level.


7:05 AM Update

SPX

This is what the cash count would look like if this were a wave 5 ending diagonal. Keep in mind again, it is way too early to tell.

/ES

Looks like futures is sporting a very similar structure to the cash market. The following options are below:

1. A wave 4 triangle with either wave (D) in progress or wave b of (C).
2. 1-2 up of 5 of a possible ending diagonal. This is too early to tell but something to keep in mind given the steady ascent of the market in a choppy three wave structure.

We will find out more shortly.