Friday, 18 June 2010

11:05 BST - ES Update

All five counts that I'm following for SPX remain on the table and will probably do so for some time. 

Last night I zoomed in on the action from the high in SPX of 1118.74, showing some ways to count it. One would be almost immediately bearish and applicable to Options 1,3 and 4 in particular.  The other two would require at least one more higher high above 1118.74 even on those three options (which are the most bearish of the five, though option 4 is only near term bearish). 

Looking at the futures this morning, I have them labelled in accordance with Option 1, showing a wave x low on 8 June and therefore, requiring an [A]-[B]-[C] advance for wave y, to complete wave (ii) of [iii].

As with SPX,  it seems possible to count them as either completing  wave y at yesterday's overnight high (so far, SPX made its high the previous day) or as requiring one more leg up to complete (5) of [C] of y.

Here's a 5 min chart showing the immediately bearish count and the alternative:

ES 5 min chart:

And here's a close up look to show how the drop from the high might count as 5 waves down for wave [1] for the start of minute wave [iii] down:

ES 2 min chart:

Obviously, the labelleing of wave [2] is entirely speculative at the moment and it may have to be moved if this count survives. In order to survive, it must stay below the high marked [5] (see the red line). If that is taken out then the focus must switch to the alternative count. So, the line in the sand for the immediately bearish case is not very far overhead. It could easily be negated prior to the cash open - futures have been very volatile this morning, albeit within a small range, and its quadruple witching.