4/22/10 - SPX EOD [10:15 PM PST Update]

[10:15 PM PST Update]

SPX 15 MIN ALTERNATE #2

SPX 3 MIN ALTERNATE #2

I think it would behoove us to count the squiggles of this potential triangle. The 15 min chart shows the count as I have below on the 60 minute chart. Based on the squiggles, if minute [iii] is considered complete at 1213, the subwaves of the triangle best indicate that only (a) is complete and (b) close to it. Subwaves (c) - (e) would have to form next.

If one were to accept that minute [iii] completed at the 1191.80 top, then the labels would indicate that subwaves (a) - (c) are complete and (d) near completion with (e) to come.

The 3 minute chart above shows that either subwave (b) or (d) is working on it's final micro waves [4] and [5].

If for some reason the market happens to thrust above 1213, we will have to accept that the triangle completed at 1190.18.

I think anyone holding a short position may want to use tomorrow's pullback as a cover opportunity if the market bounces before taking out 1190.18 because if it fails to do so, it most likely confirms that new highs are to follow before any lower lows.
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[3:50 PM PST Update]

SPX 60 MIN PREFERRED

SPX 60 MIN -ALTERNATE #2

Ok. ApartofNY in the CiL reminded me of another option I have posted on a few times here as well. See here for that.

What 1213 may have represented was the top of minute [iii], one of 3 tops I had been questioning all along as reflected on my daily chart.

I know I have been swapping alternate counts around (and hopefully you have been using the links at the top of my blog to keep track of them) but this was #2 for a bit.

The chart above highlights the potential triangle for minute [iv]. I show it starting in two potential places. For now, I will use 1213 as the top of [iii] but as an option for this chart, [iii] may have also topped at 1191.80.

EWP states that often times EW analyst will be a little premature in counting the subwaves for triangles, hence I have placed some optional labels for the subwaves in gray.

If the triangle started at the 1213 top, I show that subwaves (a) thru (d) have completed. However, I think that may be a little premature so there is an optional label showing that we closed today only forming (b). The squiggle counts may justify this as well.

The second option, where the triangle starts at 1191.80 has subwaves (a) thru (e) completed, with an option that only (d) completed today into the close.

A third option for this alternate count speculates that [iv] may not be a triangle at all and may just form a flat/expanded flat. Notice the gray label below near 1060. That is not there randomly. That assumes that if [iv] becomes an expanded flat, (c) would equal 1.618*(a), which would also be consistent with an EW guideline that states that [iv] typically completes near the price territory of the previous wave 4 (this is the triangle for minute [iii]).
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SPX DAILY

SPX - 60 MIN TRIANGLE OPTION

SPX - 60 MIN EXPANDING ENDING DIAGONAL OPTION ALTERNATE#3

SPX - 5 MIN EXPANDING DIAGONAL OPTION
(THIS INCLUDES THE BEAR COUNT)

So much for that leading expanding diagonal count. Unfortunately there are still several options out there but I am left with two bullish ones that I feel are the most appropriate at the moment. My bear count has us working on

I have to give Columbia1 of EW Trends andCharts credit for reminding me of this triangle option. My count is somewhat different than his but both imply a thrust higher in the near future.

Notice on the triangle chart, I have minute [iii] as an option for the top at 1191.80 with this triangle playing out as minute [iv]. This is something I had previously presented at the end of March when we were anticipating the breakout of the previous triangle. See here for that.

The 60 min triangle chart today highlights the larger triangle option. I have this either representing a B wave of (Z) or minute [iv] of Minor A of (Z). Refer to the daily chart for the overall view.

 

We either completed [d] today and should expect an [e] wave pullback before shooting higher or, [e] was completed today as I show in the chart.

I do have some alternate labels in gray on the chart. Please be mindful of those potential counts.

The second bullish option I show is one ending this leg since Feb with an expanding ending diagonal. As mentioned previously, this pattern, based on EWP is a rare pattern. Some argue it is quite common but I believe those patterns aren't truly of the expanded variety.

Anyway, based on the count and the expanding nature of the structure, one cannot ignore this potential pattern as it is playing out. I have it wrapping up it's final [C] wave to complete the formation. The Fib markers represent the length of [A] of (c) at 100 and 161.8%.

So it may possibly target 1216-1232 respectively in a 5 wave impulse higher.

The 5 minute chart highlights the internal count for this expanding ending diagonal (as well as the bear count. See below). The degrees are off on that chart but imply the same thing.

As for a bearish option, the 5 minute chart also highlights this. Working off the 1213.68 high, the first wave down is either minuette (a) or (i). The bounce off 1183.68 is working on (b) or possibly (ii).

For the bear options, if 1213.68 is taken out, the wave (ii) option is off the table. If tomorrow the bears cannot take out 1183.68 (my [c] wave label for the triangle), then the triangle count is alive and well.

So any bears caught today may have an opportunity, albeit a quick one tomorrow to cover/exit because whether the triangle option is in play or the expanding diagonal option is in play, we are most likely going to see newer highs.

GL!

4/22/10 - SPX AM Update

Some bullish alternatives. Minute [e] of the larger triangle count there may be done as I type this.

We'll see. I'll try to get some 5 minute charts up a little later.

4/21/10 - SPX EOD [10:00 PM PST Update Alternate Labels]

[10:00 PM PST Update Alternate Labels]

Just wanted to add the alternate labels for that leading expanding diagonal. It may need a little more time so we'll see.
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[3:55 PM PST Update H /S]

SPX - 15 MINUTE PREFERRED WITH H&S

SPX - 5 MINUTE PREFERRED WITH H&S

I forgot to include the larger possible head and shoulders formation on the 15 minute and a possible smaller scale 5 minute H&S targeting the 1180s.
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SPX - 5 MINUTE PREFERRED

SPX - 5 MINUTE ALTERNATE SUPPORTS THE EXPANDING ENDING DIAGONAL

I thought we would get some clarity today but that did not happen. I still show two very valid counts, which unfortunately indicates two different directions.

The top chart is the 5 minute preferred chart. It was pretty cool to see micro [5] top out almost exactly at the 100% Fib mark on that chart. The Fib markers represented the length of micro [1].

I have this labeled as the end of minuette (b). What follows it is where the counts diverge.

Based on my preferred, I see this as a possible leading expanding diagonal for subminuette i. In the Elliott Wave Principle, 10th Ed., page 40, Prechter writes, "This form appears to occur primarily at the start of declines in the stock market. These patterns were not originally discovered by R.N. Elliott but have appeared enough times and over a long enough period that the authors are convinced of their validity."

If this structure is correct, the bounce near the close today represents subminuette ii. I anticipate a 78% retracement as is typical for diagonals but 62% will also suffice, which is where price is now. A subminuette iii down should follow as the market works it's way down to 1150 or so. 

On the flip note, the second chart shows a 5 minute alternate that falls in line with the ending expanding diagonal. See this chart

After hitting the top of subminuette a, the decline that followed appears to be a double zigzag. Price retraced 38% and filled the open gap below at 1199.04 as expected in the previous chart for this alternate. See chart here.

The structure and the retracement levels have met the minimium requirements for a subminuette b wave. If this pullback is complete, I would expect one final 5 wave impulse higher to complete wave c for the expanding ending diagonal.

We will know soon enough which count will prevail. If 1210.99 (today's high) is taken out tomorrow, we will know that the alternate count is in play. Of course it is possible that the alternate count may require more downside retracement for subminuette b towards the 62% retracement level. So the easiest way to keep track is as long as 1210.99 holds, the preferred count is the one I'm trading.

GL!!

4/20/10 - SPX Mini Update [10:50 PM PST IWM COUNT Update] - EMINI, SPX AND IWM

[10:50 PM PST IWM COUNT Update]

Here is a look at the IWM- Russell 2000 ETF. She looks just about done.
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SPX 60 MINUTE

SPX 15 MINUTE

SPX 5 MINUTE

After presenting the E-mini count, I thought it was appropriate to re-label my SPX count to reflect the same count. So I will work with this for now and keep all the alternates/options in mind.

If this count is correct, the near term upside potential is limited. On the 60 minute chart, two trendlines come to mind that may provide that resistance. Those two are the green and orange.

If price is halted there, the possible bearish head and shoulders formation may result in a decent pullback possibly towards 1150.


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CLOSE UP

I have ignored the e-mini for sometime now but stumbled upon it tonight. Oh boy, I probably should have paid attention much sooner.

I think it is confirming my preferred count for the SPX. There are no issues with the ending diagonal as was seen on the SPX and the structure off that top is a very clear one to count. At least it appears easy to count ;)

So for now I am expecting some downside action in the very near future here. How far and in what manner will help determine what type of top we saw at the conclusion of the ending diagonal.

All the other alternates and options I have presented still are on the table so keep an eye out for those as well.