Thursday, January 7, 2010

Another possible 5 wave pattern completion coming

Today's fake out got me faked out, and it was painful. Well, the market never really pulled the plug staying above its 60 min 34 SMA the whole day. Looking over the charts again left me a bit confused as to any probable wave count, so I decided to look back at the globex chart to see I could make out a pattern that might be worth while, and here is what I got.

I'm guessing that we get a bit of volatility tomorrow morning when the unemployment reports comes out, which should give us our wave 4 and then another move higher to finish off wave 5. The channel target is around ES 1144 (~1148 in the cash index), but a wave 5 can terminate anywhere between the mid line and a small overthrow. Well it be the last or will the pattern continue to subdivide? I continue to watch the 34 SMA to have a completed wave structure. Until then, I watch resistance and support levels along with key trendlines.

BTW, the market has a historical tendency to rally into the employment report (so far on cue) and sell off afterwards (either same day or the following week), so maybe that fits with the pattern. In addition, there are a number of key fib/market timing windows starting to show up this week through the 1st week of February, so that could also play into things. I'll provide some of these charts in my weekend post.
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