11/2/10 - 8:55 PM EOD Update

8:55 PM Update

FIB CONFLUENCE

Let us not forget this chart. 1232 is a very likely target given that the ascending triangle target also hits this area.


8:00 PM Update
MTU at Market Timing Update posted a good bear and bull count tonight. I just wanted to share with my readers his take. I think it is a pretty good option.

7:20 PM EOD Update


Looks like futures managed to make a new high and break out of the triangle.


Looks like CCI broke the trend today by a mile. Daily MACD histogram made a higher print as well.


We closed over the 200 week SMA (1193.14) today. Let's see if the market holds over this a few days.



The market has been well above the 200 week SMA during the majority of the bull run as far back as 1992 (that's as far as TOS would provide). Will we see the repeat of 2004 where we whipsaw up and down just above the 200 SMA?

EOD Update

SPX - 15 Min

We're still in the ascending triangle and this was the chart of the day for me.

I was watching both the MACD trendline resistance and horizontal resistance line of the ascending triangle. The market hit both and was rejected by both, for now.

I suspected that the market would drag this out a little longer and possibly put in the actually subwave [D] of the triangle.

We started with some selling into the close and currently the 30 min MACD is on the verge of a cross down for what I believe to be subwave [E]. The alternate is that we saw wave i (though it looks too much like a three wave structure) of the final thrust up and working on ii down.

At this point though, I'm not sure if it matters if the market is working on subwave [E] or a wave ii pullback in preparation for the thrust higher.

1188 makes for a nice 38% retracement and a support level from the highs on the 21st and 28th.

Futures looks like it is going to bust through the horizontal trendline tonight so we'll keep an eye on that as well as the EUR/USD and /DS.

Gotta run for now. Will try to get some more charts out later.

11/2/10- 12:36 PM Update

12:36 PM Update

Some adjustments. Looks like (y) =.618*(w) at 1192 and (y)=(w) at 1191.

11:57 AM Update

SPX - 3 Min

I do see this pullback as a corrective move so far. I'm thinking (y) hits 1188.

11:45 AM Update

SPX - 15 Min

We have a sell signal on the 15 min. Let's see what happens. A 23.6% retracement is 1191ish.

11:24 AM Update

On a more bullish note, it is possible a nested 1-2 is in the works. The 3 min chart above shows the 1-2 in black and 1-2 in red. 1189.78 must hold for this option to play out.

11:18 AM Update

SPX - 15 Min

The 15 is starting to turn down. I'd like to see the market find support on or near that black ascending trendline of the Fib levels pointed out earlier before re-entering long.

11:15 AM Update

Triple negative divergence on 15 min MACD.

11:09 AM Update

SPX - 15 Min

That was close. It this leg up is complete, I'm looking for a retrace into the 1184-1188 range to complete [E] or it can be wave 2 of this final fifth up.

10:55 AM Update

We may blow through. Hang on.

10:34 AM Update

SPX - 15 Min

Here is how this would count as a three wave structure up. Notice the histograms are sloping down?

10:28 AM Update

SPX - 15 Min

On this chart, I stated earlier that I wanted to see the MACD trendline break above. It's hard to see it but I think she is turning back down. As I posted minutes before, the 10 min MACD is turning down.

The wave structure up right now only looks like a three wave corrective mess and since we are close to MACD trendline resistance, I'm thinking we may be turning back down.


10:24 AM Update

Had to step away for a meeting. Looks like this is another corrective wave up so far, at least everything from about 10:30 EST.

The complex [D] or [C] alternative is certainly on the table and let us not forget about the ED scenario (even though it has it's problems).

I'll try to get some charts up soon. The 10 min MACD looks like a sell signal is in store.

8:00 AM Update

SPX - 30 Min

Here's a 30 min view with candles. I like the hammer developing there if that is the end of subminuette ii.

Notice I have now added an alternate label for [D]. Keep in mind that waves C and D in a triangle may be complex and it is possible one of the two has played out.

I'm guessing here because I would have liked to seen a thrust above 1196. We may still be setting up for that but until we get it, we have to be mindful of these possible alternatives.


7:40 AM Update

SPX - 3 Min

This may be a better revised count. The top squiggles are so hard to decipher. Gotta watch the Fib retrace levels.

Keep my alternate option in mind as well.
7:18 AM Update

SPX - 3 Min

Here's my take on this structure this AM.

Pre Market

SPX - 15 Min

Here's an update to this chart that I posted over the weekend. When the market broke above the MACD trendline resistance and then back down, that gave me confidence in knowing we were only forming wave [D].

I will be watching the same thing again. I'd like the market to stay above this and above 1196.14 to confirm that we have broken out of the triangle. If we breach this line only to fall back below, then my alternate option for this triangle is most likely in effect.

/ES

This looks familiar doesn't it? From a trading standing point, this may present another nice scalping opportunity if my alternate count is in play (wave [C] bottoming yesterday).

Futures has broken out of the old converging triangle trendlines again and is approaching the barrier (ascending) triangle's horizontal resistance line.

Yesterday I proposed, as an alternate, that wave [C] may have completed. If the market cannot clear the horizontal resistance line, that count may become valid.

EUR/USD

The EUR/USD relationship to equities continues. It appears it has also broken out of it's triangle and heading for the top of it's wave b.

/DX

The dollar continues to carry an inverse relationship to equities and has fallen further out of it's triangle, which may not have been a triangle at all but a flat.

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.

11/1/10 -EOD Update 1:00 PM

EOD Update 1:00 PM

See 12:57 PM update. We shall know tomorrow. More charts and analysis later. Gotta run for now.

12:57 PM Update-

SPX - 15 Min

Ok. I had a chance to count the squiggles again and this is a double zigzag, i.e. w-x-y.

Wave [E] retraced [D] 78.6% and wave y of [E] extended wave w by 1.272.

The market needs to breach 1186.42 to confirm that the move down today was only a corrective retrace for [E].

12:35 PM Update

SPX - 60 Min

Those who have followed the ascending triangle option with me, here is how I see it on the 60 min.

12:25 AM Update- Buckle Up?

SPX - 3 MIN

They really want to keep it within the trendlines. I changed the y wave to a c wave since it counts better as a 5 down and is nearly equal to a.

If this is it, we should see a decent rally into the close. The market needs to react back to at least 1186 to confirm this pullback was a correction.


12:08 PM Update

The market is at the bottom of the ascending trendline. Wave y=w at this juncture. The market cannot break below 1171.70. If it does, the odds are very great that the triangle is over.

The only other alternate to that would be that wave [C] is still in progress and a very complex corrective.

One hour to go.

11:45 AM Update
Is wave [E] complete?

11:08 AM Update

SPX - 3 MIN

Here is the possible path I am expecting. Notice that y=.618w at 1183ish (blue Fibs) and so does the 62% retracement of [D] (green Fibs).

I cautioned just below that the [E] retracement of [D] has been met too since the 10 min MACD is looking a little bullish right now.
10:56 AM Update

If we are working on [E], it has satisfied the minimum Fib retrace of [D] at 38% and 1186. The structure may also be counted as complete.

10:35 AM Update
I'm back sooner than I thought. At this point in time, it certainly appears that option 2 is the count.

I will assume that wave [E] is in progress and so far a double zigzag wave a completed and we are working on wave b (which may be a little triangle) right now.

Fib targets are indicating that 1183 would be the first logical target to see a bounce and a possible completion of [E]. I'll try to post a 5 min chart in a sec.
Gotta run for a couple hours. Hope to be back for the final hour.

8:05 AM Update

Option 2 is in the spotlight right now. We are building an ascending triangle at the moment.

7:57 AM Update


Here's an update to this chart I posted over the weekend. The market broke over the MACD trendline resistance.

Does it have enough gas to hit 1200 or the upper trendline (blue)?

My suspicions of an ascending triangle is gaining momentum.

Pre Market

/ES

Keep option 2 in mind as posted over the weekend. So far it does look like a backtest of the broken upper trendline of the wedge. We'll have to see if wave [B] at 1193 (cash 1196.14) is breached.