5/21/11 - Weekend Thoughts

5/22/11

ES Sunday night. Still within that descending channel. Look at the unsuccessful backtest.

Going to post charts thru the weekend.

DJI- Daily

RUT- Weekly

5/20/11 - EOD Update [3:58 PM Update]

[3:58 PM Update]

I have so many charts I forgot about this one. The market has been consolidating just like the previous fractal. The last time it was range bound it last 12 days. Guess how long this one has gone now?

EOD Update

I guess you can say this was a typical wacky/volatile opex day. But with all the craziness, suffice it to say most of the counts as presented yesterday are still in tact.

Many, including myself, were watching that triangle. Yesterday I posted this

Near term, there may be a triangle playing out as part of another corrective three wave move up, which still fits well with my Minor 5 Expanding Ending Diagonal, Minor 4 Flat count and the count I am presenting again that implies a larger triangle at play. I call that count one to ponder.

However, the next paragraph I warn:

The inverted head and shoulders pattern may still be developing as highlighted on the 60 min chart below. For balance, it may require one more little leg down to test the 1332 area however, if the near term triangle structure is playing out, the right shoulder may just develop sideways.

This is why you have to be cognizant of the alternate counts. As this 5 min chart in yesterday's post highlights, a breakdown out of the triangle would indicate a wave c move down to approx 1332 where wave c=a. That obviously happened today.

Depending on your risk tolerance, if you have gotten long early on in the triangle yesterday, you either stop out at the breakdown or take a chance and watch the reaction at 1332.

Did today's action affect the daily chart counts? Not at all as you will see below.

Things to keep in mind:

1. Still closed under the 20 day SMA

2. Still in a descending channel

3. MACD , 5 - 60 min in sell mode

60 Min

Today's pullback was still part of a wave 2/b. Until proven otherwise, that is what we'll go with.

Minor 5 Expanding Ending Diagonal Option

Minor 4 Flat Option

I made some adjustments to the sub-options on this count.

Either:

1. Minor 4 completed since 5/17
2. A wave x up of [y] down in progress

3. Or some type of triangle for [y]

Something to Ponder

Again this count not affected with today's action.

Bear Option

And of course this count is still intact.

5/20/11 Pre Market

ES is testing a key level here at 1337. Previously it was resistance and testing it again now. Will it be support now?

5/19/11 EOD Update

EOD Update

The market did not close back over the 20 day SMA and is still within it's down channel off the 1370 high. The waves continue to move in corrective threes so a few things are still on the table for maximum frustration.

Near term, there may be a triangle playing out as part of another corrective three wave move up, which still fits well with my Minor 5 Expanding Ending Diagonal, Minor 4 Flat count and the count I am presenting again that implies a larger triangle at play. I call that count one to ponder.

The inverted head and shoulders pattern may still be developing as highlighted on the 60 min chart below. For balance, it may require one more little leg down to test the 1332 area however, if the near term triangle structure is playing out, the right shoulder may just develop sideways.

I think we should know no later than next week sometime if this is correctly playing out.

5 Min

60 Min

Still in the channel and may need another leg down for the right shoulder or maybe not.

Minor 5 Expanding Ending Diagonal

Minor 4 Flat Option

The sub-options still apply.

One To Ponder

The Bear count

Still lower probability but technically still valid until 1351.05 is taken out on the upside.