SPX 9/2 PM Update

Wow. I have a headache. Those were some squiggles today.

In the end, I counted the waves incorrectly. It sounded like a good idea in the beginning. At least it was determined as the day progressed that we were seeing some type of wave iv developing. The main give away was it's sideways action.

So I'm going to move forward and not worry so much about the squiggles because the little thrust we had at the close most likely signaled the beginning of wave v (most likely minuette). This would bring to an end wave 1 of a higher degree. Again, I'm still going to remain neutral on what degree I will label these waves for now.

I have placed some Fibonacci percentages on the chart to provide guidance for where I think wave (i) of P3 will end. Notice on the chart, wave v of (i) of P3 equals .618 x i at 988. This lands perfectly at the neckline.

And of course getting ahead (because it's fun to try and figure out where we may go), I noticed a nice 61.8% retracement of this leg down would place price at approximately 1020. I say that will be the length of wave (ii) of P3. I believe 1018 is a over resistance as well.

Things that I'm thinking about. Will wave v take the entire day to develop? I'm not so sure. If so, does a go jobs number on Fri spark a mini rally for wave (ii) of P3. Perhaps the Friday before a three day weekend may add to that as well. How long will wave (ii) of P3 take to develop?

If we break through the (W)-(X) line that may be bearish and possibly head lower than anticipated?

SPX 9-2 AM Update: Wave 3 Subdividing?

UPDATE #4 (11:10 AM PST): Ok given the action thus far since the beginning of this post, the wave structure has dragged out quite a bit sideways. This could be counted as a double three as well and just about give us a wave iv.

We will just have to see how the wave plays out once this retrace is complete to determine whether we are in another wave 3 or just wave 5 to 980.

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UPDATE #3 (10:50 AM PST): A wave b triangle afterall? Targets for c of red 2 does not change. It should be in the same area


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UPDATE #2: Here is another way to count this:


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UPDATE: I have added this chart below to highlight wave c =.618 x a. A break above 1002.47 will invalidate this scenario. (Thx OCO!)





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This is my attempt to count the squiggles since yesterday's fall. It appears to me that wave 3 (I am unsure of the degrees at this time so I have just labeled the waves according to count and not so much degree) may be subdividing.

If I had to guess, I would guess that it is either subdividing at micro or subminuette degree.

The retrace this AM is looking like a zigzag to me, which tells me it is a wave 2 of some degree. I projected an end for this if the wave b is a triangle and c=a. 1005 may be a target for this retrace.

We shall see...

SPX 9/1 PM Update

Ok. Let's try this again. I have eliminated, for now, my count for an expanded flat for Minor B.

Could it still be possible? Perhaps. Say Minor C turns into a running flat it would still work. Given today's action though, I'd say it is no longer my preferred count.

In the end, like I had mentioned previously, all three interpretations achieve the same result. I just cleaned up the chart a little bit and placed two counts. Again, I'm trying to keep the chart real clean.

So my primary (which again can still work with the expanded flat minute iv scenario) count at this moment would have us at the beginning of P3. I have labeled today's down leg minuette (i). However I am not certain of the correct degree at the moment. I don't think this matters so much at the moment so much that it is a wave 1 down.

By today's close we were wrapping up sub-minuette iii and possibly working on subminuette iv. Once minuette (i) is complete, which I am guestimating near 980, the bulls will attempt to buy this dip and raise spx back towards 1020 or more.

This will allow for a nice minuette (ii) retracement forming the right shoulder of the H&S formation. All this is highly speculative, but I added one more to top it all off.

I'm guessing minuette (iii) will develop a 1-2 1-2 type structure to start before the 3rd of 3rd kicks into full swing. This would fit in perfectly with broadening out the right shoulder and mimicking the step-like structure of the left shoulder.

As for my alternate, the count is in place in blue. By this count, minute [iv] is just about to wrap up before a final push higher to complete minute [v] of P2.

Once again, this alternative count, achieves the same target before carrying on with P3.

I know I am getting way ahead here. I have learned that analyzing the waves should be done one wave at a time. However, sometimes it doesn't hurt to attempt to look forward just a bit.

As usual, we will see what happens!

SPX 9/1 AM Update

-------------UPDATE 1:25 PM PST---------------
It was brought to my attention on Dan's blog that the primary count here would result in a Minor Wave C (thanks PCR, OCO and Jay_J) completing much higher than 1039, which would invalidate the H&S pattern. Doh! How did I miss that!

As I mentioned below, I was beginning to like the alternate counts better anyway. I am partly aligned with the belief that P3 has begun, however, somehow, 980 SPX may provide some support. Maybe there are still some buyers out there?

Anyway, the whole reason for this count was to provide an alternative (i.e. prepare one psychologically) if P3 was not in progress.

I will try to update the chart later with the two alternate counts. Let's just say at this point I'll be watching 980 real closely.

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So far so good. Once again call it a count gone lucky in the right direction. I believe there are potentially two counts which are better than this one that achieves the same targets.

The first alternative is that minute [iv] has not completed and will do so sometime today as a flat. Up next would be minute [v] higher, possibly truncated, to complete the right shoulder. The alternate labels are in blue.

The other count is that P3 has begun and we are seeing leading diagonal for minuette (i) (not sure of degree labeling here) off the 1039 top. Minuette (ii) retraces (i) and creates the right shoulder before heading lower in a minuette (iii). The alternate labels are in red.

Two hours left in the trading day. Let's see what happens!