Friday, 11 June 2010

23:04 BST SPX Update

Nothing much changed with today's action. All of the counts I showed this morning on 60 min charts are still in play - see here.

The one that's closest to being negated is option 1a which has us in a [i],[ii],(i),(ii), i,ii down from 1219.80. That will be negated if we trade above the wave (ii) high at 1105.67.

I'll just show the close up view of that count tonight, which could be very close to a conclusion:


I like this one over the other possibilities that I see for today's gyrations because it takes account of my view that the initial drop today and the rally that followed immediately after (before all the sideways action) look impulsive.

If this count is correct we may only have a wave 4 and 5 within (C) to complete [Y] and ii. The fib extensions shown are of wave (A) within [Y]. So far, the correction channel for this move has been respected. It may be broken as the (C) wave finishes, but a quick reversal back into the channel might provide an indication that this rally is over. 

More charts to follow over the weekend. 


18:25 BST SPX Update

Here's another way to look at the rally since 8 June - if your looking at it on the most bearish count I've shown. If its correct, we could soon see a large decline in the indices pretty soon. To remain valid, the 5th wave needs to stay below 1095.18, on the basis of the placementof the labels in the ed as shown on the chart. Also, it has to be a zig zag:


17:25 BST SPX Update

Which count we are in is still open to question at the moment, but I wonder if we are working on the right shoulder of a small head and shoulders.

Here it is on a 2 min chart:

Its height is about 11 points so the target would be around 1169, depending on where (and if) it breaks the neckline.

15:50 SPX Update

With the big reversal back up from the intial sell off, we could well be looking at one of the more bullish counts in play. Last night I posted the moderately bullish count which would put us probably still in wave (ii) of [iii], with yesterday's high being wave 1 of (C) of [Y]. See here

If that's playing out, we probably had wave 2 of (C) down and are now in 3 of (C). Having said that, today's drop looks impulsive, so not like a wave 2 at all. So, perhaps we are still in the ii of (iii) of [iii] count, which would now look like this:

Remember, as per my post this morning (see here) we could go to 1105.67 without invalidating this count, so there is still room on this count for higher prices. And of course, we shouldn't ignore the even more bullish possibilities I laid out in this morning's post.

13:45 BST ES Update

Last night I posted a bearish count showing a possible top in SPX. It looks like ES may also have topped - in the overnight session it didn't take out yesterday's highs. But, we'll see. Here's how it looks at present:

This needs to follow through to the downside now since, as a corrections in wave ii, the count looks complete. If we reverse from here, chances are we're in a continuing wave (ii) or one of the more bullish counts I posted at 10:39 BST


10:39 BST SPX Count Options - Update

Yesterday I listed 5 possible counts for SPX (see here)

I've now seperated out the various counts (most of which I had on a single 60 min chart) into individual 60 min charts so that its easier to see the options listed. It might also be helpful to refer back to the longer term charts (very long term and daily) posted on individual pages (see the menu near the top of this page) in order to see the overall context.

Here are the 60 min charts:

Option 1 -  a) [i],[ii],(i),(ii),i,ii down; or b) [i],[ii],(i),(ii) down:

As noted on this chart, 1a) will be invalidated if we move above 1105.67 and I will then consider option 1b) to be in play. In turn, that would be invalidated above 1173.57 and one of the other more bullish counts may then be at work.

Option 2 - wave [i] down complete at 1040.78, now in wave [ii] up:

This is a little ugly with the way wave (iv) retraced, but it is valid. I'd be looking to somewhere near 1150 as the likely target for wave [ii], but there's reasonable resistance lower down (see chart) which might stall it out.

Option 3 - still in wave [iv] of a leading diagonal:

As long as wave [iv] can be counted as a zig zag (ie 5-3-5), this count seems to be viable. Also, the lines of the ld must converge. I've marked on the chart where they would be parallel.

As noted on the chart, some indices already count as complete leading diagonals. Only SPX and NDX do not. On SPX its because the last low did not go below the low of what would be wave [iii]. On NDX what would be wave [iii] didn't go below wave [i] and what would be wave [v] did not go below wave [iii] and it just doesn't look like a leading diagonal. All of these points on SPX and NDX are EW rule breaches.

Is it feasible that some indices are lds while SPX is still completing one and NDX is not one at all? Yes, its possible, but it would put them somewhat out of synch. The other indices would be in a sharp wave [ii], NDX would probably be in a more moderate wave (ii) and SPX would be in a wave [iv] which would also possibly mean a substantially weaker rally than in the indices that have complete lds. Or, on SPX we could disregard the ld altogether and assume its in one of the counts in option 1b or 2 above so it would still be in a wave [ii] along with the other indices. That would still leave NDX in a wave (ii) at best.

On the other hand, all of the indices are aligned (though on NDX it would have a truncated [v]) if counted as in option 1) above (either a) or b)) or 2. Maybe this is a good reason for maintaining those counts as the main bearish counts (though option 2 is somewhat more bullish near term). Just something to consider.

Option 4 - Intermediate [X] wave down in progress:

On this count, if we take out what is currently the wave [b] high within the second zig zag, it may just mean wave [b] is still in progress.  HighRev asked me on Daneric's blog whether [X] might already be complete at the 1042.17 low. Its very possible, but I think we'd have to take out 1173.57 (the X wave high) to be sure that wave Y and, therefore [X] has already completed.

Option 5 - Intermediate [X] wave complete at 1040.78. Now in minor A up:

This count would need to be revised with a drop below 1040.78