Sunday, January 30, 2011

Weekend Update

The correction (minor 2) / or impulsive (primary wave 3) has begun. After going through my counts, it looked like I gave too much to my minute wave 4 with a truncation. But with Friday's sell off, the updated count looks perfect: alternating waves, and good wave 2/4 ratios.

The big question, of course, is this the start of minor wave 2 or the beginning of Primary wave 3. You all know where I lean, but I'm willing to take it one day at a time. If this is minor wave 2, then we should see the buyers come in hard in the 1175/1220 zone. My target for minuette wave 1/a is 1260.

Best of luck!

Thursday, January 27, 2011

What a mess...

I haven't put any updates in since the weekend because right now the wave count is so messy that I'm left with too many options. So, this is the time to take a step back and wait for the market to give us some better options. Since my wave count on the weekend update has been invalidated, that leaves me with a 5th wave extension. However, the price action has been a choppy upward grind...possibly ending diagonal? May the market show the way...

Sunday, January 23, 2011

Weekend Update

After a review of the charts, we are still at the beginning of the next wave down. As I have said, we don't know if it is minor wave 2 or the start of primary wave 3. Both are on the table. Those of you who have followed my blog know that I'm still a believer in primary wave 3. An economy that is still built on gov't bailouts is no economy ready for a new bull market. I believe history is on my side, but in the end the charts are all that matter. So, I will be objective in my charting as price action unfolds pieces to this puzzle and eliminates different wave counts.

As we are starting the potential for a wave 3/c tomorrow morning, I always like to see those start out with an acceleration gap. Let's see where it takes us.

Update on my trading system:
I started trading it with real money at the beginning of January. I've found some code errors and have made some slight modifications. The official trade log, however, shows 3 trades: 2 losers and 1 winner for a net loss of $76.90. Not too much to get excited about, but I'll keep you up to date on how it goes.

Friday, January 21, 2011

So far a nice start...

The correction (for now) started right on schedule. The first move down that ended at yesterday's low appears impulsive. We are opening today at what should be the top of a wave 2/b. How it unfolds from here will be important in forecasting the rest of the year.

Tuesday, January 18, 2011

Important juncture ahead...tomorrow?

We're coming to the end of the rope for the current move up. We should see a correction or an impulsive wave soon (the RSI points to tomorrow). This should prove out if this is a new bull market or the return of the bear. Key support comes in at 1175. Should get interesting....

Wednesday, January 12, 2011

New count needed...

Well, my preferred count went out the window yesterday and is being trampled on this morning with opening pop. That caused me to go back to the daily chart and see where I missed my subdivisions. It appears I counted to quickly my minuette waves, so with that said I have put the waves at the level that now fits well with the daily chart. To sum it up, today's open will be subminuette wave 3 of minuette wave 5. My final target for minuette wave 5 is SPX 1288.

Monday, January 10, 2011

Quick update

Sorry folks another crazy week...

Here's a quick update though from my last post. I was looking for one more high, and all we got was a failed test and a nice reversal. I'm counting the move so far a 1-2. Any buying off of today's gap down should be reversed by mid day for this count to be valid. Let's see if the bears are up for the challenge...

Thursday, January 6, 2011

One more high?

I've been quiet lately as the market has chopped back and forth. I continue to work on my automated program and have it going with real money now. I'll post my first month's results at the end of the month. I'm starting small with 1 contract to see how it fares, but I think it will be a keeper.

Wow, the bulls are really pushing and extending...Today's initial selloff looked like it might have some strength behind it, but there appeared to be an unlimited supply of buyers at today's low. Tomorrow is the unemployment report, and the reaction will be pre-market open.

Here's my forecast:

- if we're going down, then we will open below today's low. This should be sold.
- if we're going to go to one more high, then a move should be good to the 1278 / 1280 area. I'll be looking to short any weakness at this level.

Best of luck!

Sunday, January 2, 2011

Major wave completion any day...

The price action over the holiday weeks was low and choppy. However, the long-term picture is clear to one point: we are at the top of either minor wave 1 (if this is a new bull market) or primary wave 2 (if we are not). Certainly the price pattern that evolves from the coming sell off will tell us: with the higher level trend or against it.

The attached charts show all that we need to know: we are in the final stages of a 5th wave. It comes up on the weekly charts, daily charts and the hourly charts. The volatility charts support a top equivalent to 2007. We shall soon see...