12/5/11 - EOD Update

The market put in another rally high as suspected at the end of Friday last week. I also noted that should htis occur, we should be keeping an eye out for 13 waves up. So far I count 11 waves up.

If the rally off 11/25 is to be considered impulsive, it must consist of at least 5, 9 or 13 waves. A wave count of 7 or11 means the structure is corrective. I think there should be no doubt that the rally is impulsive. So with that let's assume the market wants to put in 13 waves until proven otherwise.

Last week I based my call on the choppiness of the move down. Here is a link to the 1 min chart I posted at EOD Friday highlighting my concerns, which proved to be correct.

Based on my 10 min option 1 chart below there is a very strong case for the completion of the impulse wave up. However, when drilling down the squiggles at the 1 min level, the case for a 13 wave extended impulse up is still pretty strong.

So for tomorrowI believe there may be room for one more rally higher based on the 1 min squiggle count below.

1262.52 will be the key. Should the market bounce back above this level, we can confirm that the pullback today was a three wave correction and a 13th wave up will be in the works.

However, if 1 more low is made below today's 1250.07 low before taking out 1262.52, there is a good case a five wave impulse down has completed. This will also confirm the 60 min MACD -ve divergence. If that happens, I will be looking for a deeper retrace down towards the 20 day SMA at 1226 for wave (b) of [y].

Option 1 - 10 min

Let's see if the bears can put in a new low below 1250.07 before the bulls rally the market back over 1262.52. This will help confirm which option is correct.

1 Min

The move from 1262.52 to today's 1266.73 high counts best as corrective. Therefore, we have to assume that wave 5 has not completed since it requires an impulsive fifth wave up.

13 

Based on the 1 min above, the market may attempt to put in a 13th wave.

12/5/11- Mc Clellan Breadth Thrust #2

Daily

I just wanted to point out that SPX has now put in a second Mc Clellan Breadth Thrust. To read about the first one, click here.

12/5/11 - Pre Market [5:36 AM Update]

[5:36 AM Update]

Option 1

I added the flat sub-option for option 1 above so let's watch for this as well.

Pre Market

ES

I love it when a plan comes together. Last Fri I had my suspicions on the pullback. See my comment at 2:43 and see my chart at 2:55 in our live chat room  


To remain consistent with my weekend blog post this could still be corrective wave b bounce for option2, however, given the daily macd buy signal and the fact that now there are 11 waves up of what is definitely an impulsive looking wave, we must consider 13 waves up may be in store.


Option 2 is out if a new high is made over 1260.08.

This is what the 13 waves would look like. 

The Perfect Impulse Wave

SPX - 15 Min

This is the TOS version of my 10 min option 2 count posted at EOD on Friday.After further examination of the wave structure there is a very strong case for a completion of this impulse wave and in fact this may be a poster child for the perfect Elliott Wave based on the following:


1. The overall wave count is nine waves (in red) up, which implies there is an extended wave within the structure and eliminates the need to figure out the sub-waves in between.

2. Wave 3 blue = 1.618*1 blue per the red Fib extension target

3. Wave 5 blue is nearly = .618*1 blue per the yellow Fib extension target

4. A perfect wave 5 mid channel hit utilizing the wave 2-4 channel parallel with wave 3.

5. Waves 2 and 4 blue show alternation

Though this is not my primary count, the odds are very good for this count. The main reason it is not my primary at the moment is due to the fact that the wave structure off the top is still too corrective as detailed in Friday's 1 min EOD chart. I am also watching for this wave's potential to extend further into 13 waves up.

Keep in mind though because this wave down is corrective does not mean it cannot be the start of wave 2/b down, which is consistent with my larger degree primary count. This is because wave 2/b is a corrective wave.

The easiest tell come Monday will be should the market bounce at the open and it turns into an impulse wave up, there is a very good chance a 13 wave impulse up is in progress.

However, should the bounce look corrective, then I will make this count (option 2) the primary.

Below are both options again for a visual example:

Option 1

Looking for a 5 wave impulse up.

Option 2

Looking for a three wave corrective move up.