Saturday, 12 June 2010

19:05 BST - An Alternative View of the Leading Diagonal Count

One of the options for SPX that I have running at the moment is that it is still in wave [iv] of a leading diagonal down from 1219.80 - see here

Other indices like the Dow, RUT, Comp and BKX can be counted as complete leading diagonals, but not so SPX since what is counted as its 5th wave didn't go lower than its 3rd wave - a breach of EW rules.

If SPX has not yet completed an ld, this obviously causes potential conflict between the indices, putting them in different positions in their wave counts.

So, what if those other indices haven't actually completed their lds? What if the 8 June lows were actually only the end of wave [iii] in all of them? This would immediately align all of them and all would now be tracing out a wave [iv] (I have to exclude NDX since whichever way I look at it, I can't see an ld!).

Here are the 60 min charts to show what I mean:






Its just something to consider. Counting them this way does have the advantage of explaining what would have to be counted as a very awkward looking impulse wave off the 8 June lows if the lds are complete. Those moves do look like pretty nice double zigz zags.

16:11 BST - SPX Short Term Counts

To accompany the 60 min Counts  page I've added, here are the charts showing the short  term counts relating to each of the options listed on that page:

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

I posted this last night, but I've put it here again just for the sake of completeness.  As labelled, the count suggests a bit more upside before we reach the end of wave ii. If it exceeds 1105.67 its no longer wave ii. Count 1b, putting us still in wave (ii) will then come into focus.

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

This count shows a number of nested 1,2s. for wave (c) of [ii]. It may turn out that we are actually forming a double zig zag for the 1st wave of an ending diagonal: the end of the 1st zig zag would be where I have wave [1] and we would now be in the [C] wave of the 2nd zig zag. We'll have to wait and see how that turns out. 

The count suggests quite a bit more upside is possible.

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

This count would mean fairly limited upside in [iv] in order to retain the converging lines of the diagonal - see the 60 min chart

I've shown wave c of (y) of [iv] as an ending diagonal. To be valid, all the waves have to be zig zags or double zig zags. Although wave [1] looks like an impulse, it does have some squiggles near the top that mean that it could be counted as a zig zag with a very long (a) wave - well, that's how it has to be counted here!

If we are in wave [5] of the ed, it has to be shorter than wave [3]. This means it can't exceed  1094.84 as the chart is currently labelled.  That means it has to be pretty much done now and given the way that wave [5] is labelled, a drop from the outset on Monday wouldn't be out of the question since it may well have finished  the C wave of (Y) of [5] on Friday. We shall see.

If 1094.84 is exceeded, as noted on the chart, it may be that we are still in wave [3] of the ed and its forming a double zig zag which is in its C leg. To remain shorter than wave [1], assuming waves [1] and [2] are correctly placed, wave [3] would have to stay below 1103.89. 

So, those are the levels to watch for this count as things stand currently. 

Option 4 -  We're in wave [c] of a second zig zag  (wave Y) down:

The count from the 1042.17 low would be as in either option 1 or option 3 above.

Option 5 - We completed an [X] wave at 1040.78 - now in [iii] of minor A:

This shows the nested 1,2 count which would be appropriate for a third wave. Its suggests substantial upside and, eventually, new highs.

13:02 BST - Added new menu item: 60 minute counts

See the menu tab near the top of this page