22:05 BST - SPX Update

Today's action finally reduced the counts for the decline from 1131.23 to 1010.91 down to one for the main labelling on each of the Options I am following for the decline from 1219.80, namely a 5 wave decline (you'll see from the 60 min chart of Option 2 on the 60 min counts page that for the alternate labelling on that chart, it could be a 3 wave delcine). 

The Options are the different ways to count the move down from 1219.80. There are 5 that I'm following and they are set out on the 60 min counts page. 

For the move up from the 1010.91 low, I've been posting the doube zig zag count today, which looks like it could be complete at today's high. This count applies to Options 1, 2, 4 and 5 (though on the chart of Option 5 below I've shown a single zig zag count). For Option 3, I'm labelling part of an impulse up from 1010.91, as you'll see below.

Here's how things stand after today:

Option 1 - Wave (ii) of [iii] topped at 1131.23

12 min chart:

Five waves down from 1131.23 on this Option represents wave i of (iii) of [iii] of minor 1. The double zig zag I have labelled from the 1010.91 low would be wave ii of (iii), so implies a wave iii of (iii) decline once its complete.

 

Today's high is the invalidation point for the completion of wave ii on the double zig zag as labelled.

Option 2 - Wave [ii] topped at 1131.23

12 min chart:

For this Option, five waves down from 1131.23 represent wave (i) of [iii] of minor 1 down.

The double zig zag up from 1010.91 would be wave (ii) of [iii], so once complete, we would be in wave (iii) of [iii] down.

Again, today's high is the invalidation point for the complete double zig zag as labelled.

Option 3 - Wave [iv] of an ending diagonal completed at 1131.23

12 min chart:

For this Option, 5 waves down from 1131.23 to 1010.91 could be  wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  

It places us now in minor wave 2 up.  I've labelled the start of 5 waves up from the 1010.91 low, on the assumption that we will get a zig zag type move up for wave 2, since we  would be retracing the whole decline from 1219.80, not just the drop from 1131.23.

I'm showing us having completed wave (iii) of what I'm assuming at the moment will be a 5 wave move for wave [a] of minor 2.  This would mean the next pullback will be wave (iv) of [a]. This count would be invalidated if that assumed wave (iv) were to fall below 1028.74, the wave (i) high.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that we are now retracing back up in wave (b). Its possible that wave (b) completed at today's high, in which case, we'd now be about to start wave (c) down.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

Option 4 - Wave [b] of minor Y within intermediate [X] topped at 1131.23

15 min chart:

For this Option, 5 waves down from 1131.23 would be wave (i) of [c] of minor Y and the double zig zag up from 1010.91 would be wave (ii) of [c].

 

However, as mentioned yesterday, counting a complete 5 waves down to 1010.91 does bring in the possibility that wave [c] of Y is done so we have also completed intermediate wave (X) - see the 60 min counts page.

Option 5 - Minor wave X within intermediate wave [X] topped at 1131.23. Now in minor Y down

12 min chart:

On this Option 5 waves down to 1010.91 would be wave [a] of minor Y down and the retracement would be wave [b]. If its over, we would now be headed down again in wave [c] to complete minor Y.

For completeness, here's the chart of the double zig zag, zooming in on it from the low of wave (4) of [A], to show how it may count as complete now:

SPX 1 min - complete double zig zag:

16:04 BST - SPX Update

Here's a close up of the chart I posted earlier showing the count from the wave (4) of [A] low at 1058.24:

SPX 1 min chart:

This close up shows the count as incomplete, but what I have as wave (3) could easily be wave (5) and the end of the second zig zag, as labelled in the earlier chart. I think we have to take out the wave (1) of [C] high at 1077.95 without making a new high to invalidate the count shown since wave (4) of [C] can't end below that level.

15:40 BST - SPX Update

Well, the last ending diagonal count was invalidated by the move above 1092.99. So, here's another possible way to count a double zig zag up from the 1 July low:

SPX 1 min chart - double zig zag:

Though I'm showing it as complete, the squiggles allow for a bit more upside, depending on where the labels are put. Wave y will be 2.618 x wave w at about 1101, so that might be where its headed if it hasn't completed at today's high.

 

14:04 BST ES Update

I can't say this is a high confidence count, but everything I'm watching does seem to be moving higher in a wedgie fashion and on waning momentum.

If its a diagonal, wave (5) needs to be shorter than wave (3), so I think the invalidation point is at about 1089. So, it could be invalidated quite quickly.

ES 5 min chart:

22:10 BST - SPX Update

Alot of choppy sideways action again today. which means not much has been resolved since Friday.

The Options listed below are the different ways to count the move down from 1219.80. There are 5 that I'm following and they are set out on the 60 min counts page. 

On the chart of each Option I have labelled one of the 2 remaining Counts  for the decline from 1131.23. Each of these Counts could apply to any one of the Options, though what they mean may differ depending on which Option you are looking at. Count 1 shows 5 waves down from 1131.23 complete at 1010.91 and we are retracing the whole of that decline, while Count 4 shows a (i), (ii), i, ii decline from 1131.23 to 1101.91 and we are only retracing the decline from 1082.60 which is the wave i start point.

Here's how things stand after today:

Option 1 - Wave (ii) of [iii] topped at 1131.23

10 min chart:

I've applied Count 1 to the chart of this Option. It assumes that we completed 5 waves down from 1131.23 to the low of 1010.91. From that low, I've labelled a double zig zag count with the (C) wave of [Y] possibly complete at today's high, applying the count I showed earlier, of the ending diagonal for wave 5 of (C) which started at the 1058.24 low.


It remains to be seen whether or not that count will survive - today's high is the invalidation point. If we take that out, there remains the count showing an ending diagonal from the 1039.93 low, which appears to be in its 5th wave - it has to stay below 1092.99 to remain valid.


So, we just have to wait and see what the market does next on this.

Option 2 - Wave [ii] topped at 1131.23

10 min chart:

For the decline from 1131.23 to 1010.91, I've applied Count 1 to the chart of this Option also.

For the move off the 1010.91 low, I've also shown a double zig zag, but the [C] wave of the second zig zag is labelled differently. For the 5th wave of [C] I've assumed an ordinary impulse in is progress. (see the chart below showing an impulse wave from 1058.24). 

It could count complete at today's high, but we really need to see some decisive downside action to be convinced that it is a complete impulse.  Perhaps taking out the wave 4  low at 1069.54 might be a start.

Option 3 - Wave [iv] of an ending diagonal completed at 1131.23

10 min chart:

I've also applied Count 1 to the chart of this Option, giving us 5 waves down from 1131.23 to 1010.91.


I've labelled this 5 wave decline as wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  It places us now in minor wave 2.  I've labelled the start of 5 waves up from the 1010.91 low, on the assumption that we will get a zig zag type move up for wave 2, since we  would be retracing the whole decline from 1219.80, not just the drop from 1131.23.

I'm showing us currently in wave [3] of iii, which could well have been completed at today's high. If  wave [3] is complete, wave [4] will have to stay above the wave [1] high at 1042.50 for the count as labelled to remain valid.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that we are now retracing back up in wave (b). Its possible that wave (b) completed at today's high, in which case, we'd now be about to start wave (c) down.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

Option 4 - Wave [b] of minor Y within intermediate [X] topped at 1131.23

15 min chart:

I've applied Count 4 to the chart of this Option. It puts us in an extending 3rd wave down from 1131.23. 

We've now retraced over 94.1% of wave i of (iii) - its still a valid 2nd wave, but its close to invalidating this count. Remember, the retracement can't exceed 1082.60 if this count is correct. If it does, it'll be likely that Count 1 is in operation (see chart of Option 1 above) and that will bring in the possibility that wave [c] of Y is done so we have also completed intermediate wave (X) - see the 60 min counts page.

I've shown the double zig zag count up from 1010.91. For wave (C) of [Y], I've shown the count for an ending diagonal from 1039.91 (the low of (B) of [Y]) making the whole of (C) an ending diagonal. 

This diagonal  looks like it still needs another up leg to complete the 5th wave of the diagonal. The 5th wave only needs to get above 1080.78 if the labelling is correct - but it has to stay below 1092.99 to remain a valid diagonal.

Option 5 - Minor wave X within intermediate wave [X] topped at 1131.23. Now in minor Y down

10 min chart:

On the chart of this Option I've also applied Count 4, so the comments made in respect of invalidation on Option 4 also apply here. 

I'm also showing a further alternative way to count the rally from 1010.91. Its a single zig zag, but different from the one I've shown previously in that we would have wave [C] starting from the low at 1018.33.


I've shown wave [C] as complete at today's high. If its not, then this (i)-(ii)-i-ii Count may be invalidated and I'll switch it to Count 1 showing a complete 5 waves down from 1131.23 so that we'd be retracing the whole of the decline from there to 1010.91.  It may not make a great deal of difference if we are in wave (ii) of [a] down, or wave [b].

Here are the charts dealing just with the last few day's action, showing the complete ending diagonal, the impulse up from 1058.24 which also looks complete and the ending diagonal that still appears to be in progress:

Complete ending diagonal - see the chart of Option 1 above:

Impulse from 1058.24 - see the charts of Options 2 and 3 above:

Ending diagonal still in progress - see the chart of Option 4 above:

18:38 BST - SPX Update

We've possibly had an impulse down from today's high (on my labelling, wave 3 is about 1.618 x 1 and 5 is about 2.618 x 1):

SPX 1 min - ending diagonal complete at 1080.78:

Obviously, today's high is the invalidation point.

If we take out the high, this ending diagonal may be the one in play:

SPX 1 min - ending diagonal from 1039.91:

Wave [5] has to stay below 1092.99 to be shorter than wave [3].

15;27 BST - SPX Update

Well, this ending diagonal would have to be counted as complete now (its the one in the first chart in the weekend update):

SPX 1 min - ending diagonal complete at 1080.78:

However, the one I posted in the 3rd chart in my weekend update could still be in progress - we'd have to drop below the dotted line without making a new high to invalidate it:

SPX 1 min - ending diagonal from 1039.91 still in progress:

15:45 BST - SPX Update

I think its possible to count either an ending diagonal or an impluse wave complete at today's high for either a 2nd wave corrective high or wave [3] of iii in an impulse up from the 1 July low. These are two of the charts posted at the weekend which I've updated with today's action:

SPX 1 min - ending diagonal from 1058.24:

SPX 1 min - impulse from 1058.24:

The impulse count may be the more likely to be complete, whereas the ending diagonal count could still only be in wave [4], today's high being wave [3], rather than wave [5]. On that count, we'd need to see the wave [2] low taken out to feel sure that the ending diagonal is complete.

13:10 BST - ES Update

Its possible to count 5 waves down from Friday's high on ES:

Es 5 min chart close up:

The alternate that we are still in the 4th wave down seems unlikely given how much it has retraced (over 61.8%). Clearly, Friday's high would be the invalidation point for this count.

If it does turn out to be correct, it would fit nicely with the completed ending diagonal on SPX that I showed on Saturday. Obviously, be aware that the other counts I showed in the same post anticipate more upside and I don't think the risk of that can be completely discounted at the moment.

Here's a wider view of the 5 min chart for context:

ES 5 min:

 

11:13 BST - Dollar Update

From the dollar page which I updated this morning, this continues to be my preferred count:

Dollar Daily - Option 2B: minor 3 extending, currently in [iv] of 3:

This chart doesn't capture today's push up in the dollar since the potential ending diagonal that I posted on Thursday 8 July, but it is looking like we may have seen the end of a wave [iv] correction, if this count is correct (as pointed out on the dollar page, the drop from 7 June could just be the completion of the first leg of an intermediate wave (2) correction which has a lot more downside to go).

Here's the 60 min ichimoku chart:

Its looking like the beginnings of an uptrend on this timeframe, with price above the turning (blue) and standard (red) lines and above the cloud , the turning line above the standard line and the lagging line (turquoise) above the cloud as well as above prices of 26 periods ago.

If this is a sustainable move up, pullbacks in price should now find support at the turning and/or standard lines and the lagging line must stay above the price line.

The initial aim is to see the wave iv high at 84.826 taken out, with the (b) wave high folowing quickly after that. As mentioned, caution is still nevertheless required given the possibility that Option 2B (see the dollar page) is the correct count.

My count for the Euro fits well with my favoured count for the dollar. Here is the daily chart:

Euro Daily:

Obviously, it could just have easily completed minor 5 at its June low, as shown in my Option 2B for the dollar (see the dollar page) which is my next preferred count. However, at the moment, the retracement since the June low does look to me more like a wave [iv] within minor 3, but that can change quickly. So, caution would be required on the short side here.

10:27 BST - Dollar Page Updated

See the dollar page in the menu above or click here

18:21 BST - SPX Update - Counts for action from 7 to 9 July 2010

In last night's Update I posted various ways of counting the move from the low at 1010.91, which included alternative ways of counting the action of the past two to three days. I thought I'd take a break from the heat and humidity we're experiencing over here and have a closer look at those possibilities.

I'm looking at the counts on the charts of Options 1, 2, 3 and 4 from last night.

Chart of Option 1:

On this chart, I'm showing an [X] wave low on 6 July at 1018.35. From there, I have an (A)-(B)-(C) move with wave 5 of (C) as an ending diagonal starting from the 4 of (C) low at 1058.24.

On last night's chart of Option 1 the labelling showed  waves i to iii of the ending diagonal possibly complete. Looking at it close up, it may be nearer to completion than that. Here's a 1 min chart showing the move from 1058.24 (ignore the wave degrees - I upped them for ease of labelling):

SPX 1 min chart - ending diagonal on Option 1, from 1058.24:

I don't think this looks too shabby, apart from the little foray of wave (B) of [3] below the lower line of the diagonal. However, I'd be prepared for more upside just in case we really are only in wave [3], with [4] and [5] yet to come.

Charts of Options 2 and 3:

On these two charts I labelled an impulse wave from the 1058.24 low. I posted the detail last night, but here it is again for the sake of completeness:

SPX 1 min chart - impulse on Options 2 and 3 from 1058.24:

Nothing to add on this one, except that if we have started the final 5th wave, I wouldn't be surprised if it takes the form of another ending diagonal.

Chart of Option 4:

On this chart, from the [X] wave low at 1018.35, I labelled an (A)-(B)-(C) move up. The (B) wave low is at 1039.91 and from there, I showed a possible complete ending diagonal. I said last night that I didn't think it is valid since wave 4 of the ending diagonal doesn't appear to be a zig zag. Here it is close up (again, ignore the degree of the labels):

SPX 1 min chart - ending diagonal on Option 4 from 1039.91:

I still don't think that what I show as wave 4 of the ending diagonal on the Option 4 chart from last night can be labelled as a zig zag - if it is one, its an odd one. On the 1 min chart you can see that what I have as wave 4 on the Option 4 chart I prefer to count as part of the zig zag for wave 3 of the diagonal. This means waves 4 and 5 to come.

Of course, the ending diagonal shown on the chart of Option 1 last night, which didn't look complete, may in fact be complete or very nearly so looking at the 1 min chart above. That count can also be applied to the chart of Option 4, so my concern over this ending diagonal may be meaningless!

13:14 BST - 60 min Counts page updated

See the 60 min Counts page in the menu above.

22:49 BST - SPX Update

Well, it seems that it was right to be cautious as to whether or not we had made a top given that the market was not dropping with any meaning at the time I posted a possible count into a top (see here).

Still, the rally today was odd in that it wasn't very impulsive looking, but of course, there's still time for it to develop. However, there are various ways to account for the action, which I'll show in the charts below.


Remember that the Options listed below are the different ways to count the move down from 1219.80. There are 5 that I'm following and they are set out on the 60 min counts page. 

On the chart of each Option I have labelled one of the 2 remaining Counts  for the decline from 1131.23. Each of these Counts could apply to any one of the Options, though what they mean may differ depending on which Option you are looking at. Count 1 shows 5 waves down from 1131.23 complete at 1010.91 and we are retracing the whole of that decline, while Count 4 shows a (i), (ii), i, ii decline from 1131.23 to 1101.91 and we are only retracing the decline from 1082.60 which is the wave i start point.

Here's how things stand after today:

Option 1 - Wave (ii) of [iii] topped at 1131.23

9 min chart:

I've applied Count 1 to the chart of this Option. It assumes that we completed 5 waves down from 1131.23 at the low of 1010.91. From that low, I've labelled a double zig zag count with the (C) wave of [Y] still in progress but possibly in its final throes. 

I've shown the action today as part of an ending diagonal for the 5th wave of (C)

We filled the gap I mentioned yesterday and we're right in the middle of the significant area of price congestion that exists up to about 1085. That level would also be a .618 retracement, so may well be the target for the end of wave ii.

Option 2 - Wave [ii] topped at 1131.23

9 min chart:

For the decline from 1131.23 to 1010.91, I've applied Count 1 to the chart of this Option also.

For the move off the 1010.91 low, I've also shown a double zig zag, but the [C] wave of the second zig zag is labelled differently. For the 5th wave of [C] I've assumed an ordinary impulse in is progress. (see the chart below showing an impulse wave from 1058.24). Its likely that there is still more upside to go on this, but the way I have labelled it for the moment means that if we take out 1072.89, its probably finished. However, it would probably be safer to wait for the low at 1069.54 to be taken out.

Option 3 - Wave [iv] of an ending diagonal completed at 1131.23

10 min chart:

I've also applied Count 1 to the chart of this Option, giving us 5 waves down from 1131.23 to 1010.91.


I've labelled this 5 wave decline as wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  It places us now in minor wave 2.  I've labelled the start of 5 waves up from the 1010.91 low, on the assumption that we will get a zig zag type move up for wave 2, since we  would be retracing the whole decline from 1219.80, not just the drop from 1131.23.

I'm showing us currently in wave [3] of iii. Once wave [3] is complete, we'll retrace down in wave [4] and it will have to stay above the wave [1] high at 1042.50 for the count as labelled to remain valid.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that we are now retracing back up in wave (b). The double zig zag count would apply to the (b) wave.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

Option 4 - Wave [b] of minor Y within intermediate [X] topped at 1131.23

15 min chart:

I've applied Count 4 to the chart of this Option. It puts us in an extending 3rd wave down from 1131.23. 

We've now retraced over 94.1% of wave i of (iii) - its still a valid 2nd wave, but its close to invalidating this count. Remember, the retracement can't exceed 1082.60 if this count is correct. If it does, it'll be likely that Count 1 is in operation (see chart of Option 1 above).

I've shown a slightly different labelling for wave (C) of [Y], making the whole of (C) an ending diagonal. However, I don't think its valid (so I haven't done a close up chart) since its difficult to count  the 4th wave as a zig zag. Still, we'll see. If one of the other counts for (C) of [Y] is in effect (see the charts of Options 1 and 2 above) then the remaining upside which is likely on those counts may well lead to the invalidation of this Count.

Option 5 - Minor wave X within intermediate wave [X] topped at 1131.23. Now in minor Y down

9 min chart:

On the chart of this Option I've also applied Count 4, so the comments made in respect of invalidation on Option 4 also apply here. 

I'm also showing a further alternative way to count the rally from 1010.91. Its a single zig zag, but different from the one I've shown previously in that we would have wave [C] starting from the low at 1018.33.

Again, there may well be more upside to come and that could invalidate this Count, in which case I'll switch it to Count 1 showing 5 waves down from 1131.23.

Here is the double zig zag count updated from yesterday, which is on the chart of Option 1:

Double zig zag:

And here is the impulse from 1058.24 which is on the chart of Option 2:

Have a great weekend!

17:07 BST - SPX Update

Well, if we did top out at today's high, this is how I would count the start the next decline:

SPX 1 min:

I can't say that the market seems like its in any hurry to drop, so caution required as to whether or not we've made a top.

Bear in mind also my update at 12:17 BST setting out the risks that the next drop may only be a temporary suspension of the up move.

15:53 BST - SPX Update

Looks like a possible wedge into a top? Let's see:

SPX 1 min:

14:11 BST - ES Update

The high of the 5 wave move up on ES shortly after the open yesterday looked like the completion of wave [C], but it seems it was only the 3rd wave of wave [C]. It took until after the cash session closed for ES to take out that early session high.

Now it looks like we may either have a top for wave [C] or be very close to one, just as appears to be the case on SPX. Here's the ES  chart:

ES 5 min chart:

 

12:17 BST - SPX Update

In last night's update I posted the chart of the double zig zag I've labelled from the 1 July low. I labelled it as complete at yesterday's high, but on the charts of 4 of the 5 Options I'm following for the decline from 1219.80, I labelled it as requiring one more high to complete, or complete at yesterday's close with a truncation.

Either way, the count implies that the double zig zag  from 1 July  is on the verge of completing if it hasn't already done so. Since triple zig zags are said to be rare, this would likely mean that we would also be at the end of the whole correction since 1 July.

That would fit well with us being at a 50% retracement level, resistance and a gap area, as shown on this 5 min chart of SPX:

SPX 5 min - Count 1 with double zig zag:

However, if we only have a single zig zag from 1 July (I posted this before the open yesterday but during the session I only updated the double zig zag count), then once that is complete, the market should fall back from there, but we'd need to be alert to the risk of a second zig zag developing to achieve a greater retracement than the first did. Here is the updated chart of the single zig zag count:

SPX  1 min - single zig zag:

The thing I don't like about it is that wave (2) of [C] is such a shallow retracement. Still that doesn't invalidate the count, so assuming its a possible count, it too could just about be complete, again, at the 50% retracement level, etc.

As I've said, once complete, the market should fall back and, if its the end of the correction, then the decline should be pretty swift, given that we would be in a 3rd wave down on virtually all the Counts I'm following (the exception possibly being Option 3 as explained in last night's update).

The trouble is that a double zig zag could develop at any stage provided that the wave [A] low isn't taken out. Having said that, the deeper the decline, the greater the odds will be that a second zig zag will not develop simply on the basis that you want a zig zag to look like one. Sill, unless and until the wave [A] low is taken out, it will be difficult to know for sure that the correction is over, so caution will be required on the short side until then.

Of course, I can't ignore the potentially bullish labelling I have on the chart of Option 3. This puts us at the start of a possible 5 wave move up for the first leg of a minor wave 2 correction of the drop from 1219.80, on the basis that we completed a leading diagonal  minor wave 1 at the low of 1010.91. Here's a close up of this labelling of the move from 1 July:

SPX 1 min - impulse from 1 July low:

On the basis of the way I've labelled it, we're nearing completion of  wave [3] of iii. Obviously, we'd expect a wave [4] retracement next. Here, we have a level to watch for that will raise the odds that we're not seeing an impulse up - 1042.50, the high of wave [1] of iii. Wave [4] can't end beyond that level. If it does, then the count as labelled is invalid.

So, if we are at the end of a correction off the 1 July low, we need to see a decisive and, preferably, swift, decline in 5 waves from wherever the correction ends. Anything less might have to be regarded as a potential warning that we only had a single zig zag up from 1 July and a second is now about to begin, or, that we are in a much more bullish and deeper retracement up, retracing the decline from 1219.80, not just the decline from 1131.23 (and on this latter potential, taking out 1042.50 would be a very strong indication that this impulse count is not happening).