12/13/11 - EOD Update

The market continues to form a complex correction. One thing is for sure, this is a very choppy/overlapping wave structure down most indicative of a correction.

The market managed to close above the 20 and 50 day SMA as well.

SPX - 30 Min -Option 1

Earlier today, I posted the brown alternate labels. I have not had a chance to re-label this as the primary but this is what I'll be working with for now.

The 60 min MACD sell signal may be indicating that the market may be heading towards the lower blue TL and 50% retracement at 1213. However, the wave structure per the brown labels may count complete right at two key SMAs.

Notice the potential descending triangle and potential wedging patterns forming as well.

Keep in mind the blue alt labels are still applicable.

Daily BBs

Closed right above the 20 and 50 day SMAs. MACD is curling down though.

SPX- 60 Min - Triangle Option

I have been posting this option for the past few days. I'm still watching this especially because of the overlapping nature of the waves.

It is possible wave D may still be in progress. If not, this should be wave E wrapping up.

SPX - Daily - Triangle Option

Here's the bigger picture to the tri option above.

ES

Last night I had a feeling ES may be forming a triple +ve divergence. Well it looks like it is doing so and wedging down. Let's see what tomorrow brings and if the triple divergence results in a TL break to the upside.

RUT - 30 Min

The RUT has a falling wedge look to it and counts as a very nice complex corrective w-x-y that may be in it's 4th wave of c of y.

VIX

The VIX managed to close back inside it's lower Bollinger band and thus eliminating the initial the first step of the equity sell signal. The VIX also closed below it's 200 day SMA.

DX - 60 min

The dollar is sporting a -ve MACD divergence on the hourly and may be setting up one on the daily below.

DX- Daily

12/12/11 - EOD Update

Looks like my initial suspicions were correct in calling a top last Friday. Clearly wave v did not extend and clearly the correction off the wave (a) had more to go.

I presented this option in the CiL this AM and so far this looks pretty good.

SPX - 30 Min

There is a lot of congestion near the day's low but it is very possible to count a nested 1-2 i-ii up. We shall see early tomorrow if this bounce is only an x wave bounce as I have listed as the alternate.

SPX - 60 Min Triangle 

I presented this count last week and I'm starting to pay more attention to this given the wild back and forth we have been seeing at the moment. Notice that my 30 min counts fits this scenario well  should wave E need one more push lower.

We should really start to pay attention to this if the market does not break through the upper descending trendline.

12/9/11 - EOD Update

The past several weeks have been challenging and rewarding all at once. Last night's call that the pullback was complete was yet again nicely timed.

If you missed me today in the CiL or on Twitter (at right), I discussed in real time today 2 areas where one could have enter long for an intraday trade based on EW.

I do not do this often and I maintain that it is not a recommendation to trade. However, it was a good example to teach others how EW can be used.

SPX - 5 min

This 5 min chart highlights the pullbacks where these calls were made. If you browse the CiL, check out the entry at 10:15 for the trade and 10:17 for the stop.

The 2nd example was mentioned at 11:44.

The technique can be applied at other time intervals. Today's 5 min chart was a good time to show this since the wave structure was developing quite clearly.

As far as the counts go, I believe the market is working on wave v which is subdividing in grey. Since wave iii is shorter than i, wave v cannot be greater than iii. Therefore, wave v cannot exceed 1263.

This would make for one more attempt at the 200 day SMA. Wave 1 completes here and is smacked down into a wave 2 before shooting higher through it for the 4th attempt.

I can easily call the top at 1258.25 today as well where I have wave 1? labeled. I'm giving the subdividing wave v the benefit of the doubt at the moment since the late day buying and selling held along the ascending trendline.

As for the ascending trendline, somehow that may be hinting at a larger ascending triangle that may be forming  as well so we need to keep an eye out for this.

Should the market pull back below 1252 starting on Monday, I will feel more confident that five waves up off the 12/8 low are in.

SPX - 15 min

The 15 min picture with the sub-alternate in red. The flat for wave (b) is a good alternate to watch out for, especially if it turns into a running flat.

This would fool folks buying the breakout over the 200 day SMA and then trap the bears selling it back below, while the market maintains above the 20 (1226) and 50 (1219) day SMAs.

SPX - Daily - Primary

Here's the primary daily picture I have maintained. So looking at it from this perspective, the market is in the midst of shooting higher in what will be a third wave.

At the moment, that third wave may be wave c of y or 3 of 3.

Triangle Option 1

This AM in the CiL, I posted the Triangle Option 2 chart below, which came to me randomly while I was noticing the series of three wave structures on the hourly. When I zoomed out to the daily, that is what I say.

Upon looking at this some more, I came up with Triangle Option 1 as well.

Just something interesting to think about for now. We'll come back to it later should there be more evidence of this playing out.

Triangle Option 2

12/8/11 - EOD Update

After a few days of jockeying back in forth between the triangle, rectangle, option 1 and 2 counts, it looks like the market has chosen to break down out of the range. This makes sense given the fact that we were able to count 13 waves up off the 11/25 low.

The previous option 2 count has taken the driver seat for the moment. So with those13 waves up from 11/25, I have marked it as wave (a) and now the market is working on what may be a complete wave (b) as you will see below.

15 Min - Option 1

Wave (b) may be complete as wave y of (b) = 1.618*w of (b) and wave (b) has retraced wave (a) approximately 38%.

The 3 Min Correction count below highlights the subdivision for wave y as a corrective wave.

However, if the market intends to correct further to the 50% and 62% retracement levels, keep an eye on the "or a" grey labels. The 3 Min Impulse count below highlights this potential.

3 Min - Correction

3 Min - Impulse

60 Min- Primary

Let's not forget about the bigger picture. Notice how wave b is now approaching the purple TL?