2/2/11 - EOD Update- The Bear Is Back

EOD Update

Actually the bear isn't really back but a bear count option is back. A boring day today as to be expected after a large run up the other day.

It was a little frustrating trying to guess which direction the market was going to break when it appeared a triangle was developing, which in the end I don't believe was the case.

The bulls couldn't follow through with another up day, however, I think the bias is still to the upside since the market held above 1300 and specifically 1303.

Today should be treated as a consolidation day, or a rest day as they say, before the march continues higher. At least that is what my primary count is telling me.


The primary count has wave 4 complete or just about complete into the close. The 60 min chart sports a nice looking pennant, which is bullish at the top there.

Take note though of the bearish looking MACD.

The 3 min chart breaks down wave 4. Some options for wave 4 depending if the subwaves are an a-b-c or w-x-y.

I think some proper Fibonacci retracement levels may help in determining where this leg may end should there be so follow through to the downside.


Here's an update to the Golden Section chart I posted last night. I didn't move a thing other than the wave 4 label. The first reaction low for this wave may have been the marker for wave 4.

We'll see if 1302 is the low for 4 and see if 1320 pans out for 5. For folks unfamiliar with the Golden Section topic, see this link.

Bear Count

And we bring the potential bear count back. Now, I call it a bear count only because it signifies a change but not a crash scenario.

Anyway, there is a way to view this as a potential wave 1 and 2 down so far. We'll just have to see and the bears have to bring it on and act on that 60 min macd bear cross that is setting up.

Ok. Gotta run for now. Will post more stuff later.

2/2/11 - 9:07 AM Update

9:07 AM Update


Some options but I think 4 blue may be wrapping up here.

Pre Market

ES is sporting a wave c of 4 as expected with cash so far. We'll see if something else is in store.

Levels to watch in cash are 1300, 1295 and 1291 for wave 4.

2/1/11 EOD Update [3:50 PM Golden Section Update]

[3:50 PM Golden Section Update]

Using the principles of the Golden Section and how it applies to an impulse wave, we may be able to project for wave 5, once a wave 4 low is established. I will adjust the Fibs once I am comfortable wave 4 is in to project for wave 5 using this technique.

For now, I will assume wave 4 retraces to 1300, the wave 4 low of the previous trend, which is also approximately the 38% retracement of wave 3.

EOD Update

A fourth failed head and shoulders pattern. Bears have failed to take control once again.

Needless to say the April top comparison, as promising as it was for the bears, did not play out.

I still don't understand why folks continue to try to find the top? I have no bear count option, not until a five wave structure down is put in.

Here is my primary count cleaned up with just one option now finally. The wave 4 count panned out perfectly and the squiggles I presented arguing that the last downdraft was part of a larger corrective paid off.

I have the market working out a fifth wave (still open for interpretation as to a fifth of what?). The degrees on the chart for the blue labels may have to change if this is only the first five wave set of five to come.

Notice the fib targets for wave 5 to 1 ratio? Both are relevant levels so we'll just have to see what the structure looks like as it approaches those levels.

I believe a wave 4 is in store here so we'll have to see how the next day or two plays out. It is likely that the market may only go sideways over the next day or two.

Here's a 3 min view of the internals for the main count. A possible target for wave 4 is somewhere near 1300 or as low as 1291. We'll just have to keep an eye on the structure as it develops.


Fib fans and the 1313 target. Nothing in the way of achieving this level.


This channel continues to be respected and notice again the daily MACD trendline support. The top of the channel is currently at 1320.

TNA

The TNA pennant broke out today to. I think a wave 4 pullback down to the broken trendline is a possible target.

RUT

Working on it's wave 5.

Pre Market [6:15 AM Update]

[6:15 AM Update]

The head and shoulders pattern that may be playing out was brought up in the chat room. This is a chart I say to keep in mind.

Perhaps it will succeed on 4th try or perhaps not. Just something to think about...

Pre Market


ES is approaching 78.6% retracement. Odds have decreased that this may be a wave 2 bounce given that a wave 4 flat is on the table. Wave 2 has not been ruled out yet of course, but the odds have diminished.

As suspected last night, copper futures put in a new high and a bull cross occurred in MACD.

However, keep in mind, as bullish as the open may appear to be, this bounce was expected if one were following the April topping pattern as I have over the past several days. My primary count has us working on a 5th wave up to a new high, however, I'm watching this in case Apr plays out again.

So far, the market is mimicking the Apr top to a 'T'. Today's candle may match that of April 29, orange marker.

The difference between the open and close for that day was 14.48 pts and the difference between the high and low was 16.06.

The retracement was a pretty steep one as well. The bounce retraced the initial decline approximately 73%. Should this repeat, we may see a test of 1295 and that's that.

We'll see....