So the question of the day is...Is w5 of 3 subdividing or are have we started a larger w4 correction. We won't know for sure w/o some more data points. My preferred count (see above chart) right now is that w5 of 3 is subdividing. In this scenario we put in a w2 high in the afternoon, and we are starting w3. This should be pretty easy to spot tomorrow morning as we should be below 700 in the first 60 min of the US session.
The alternate count (see above chart) will be most easy to spot if 704 holds in the first 30 min tomorrow. If not, then as long as 699 holds within the first 60 min, then we will likely be in w4. There will be no guarantees though until we either break today's high or yesterday's low.
Now, if we are in a w4, then we should prepare ourselves for either a triangle or zigzag (or even a double zigzag). Because our w3 has been so shallow compared to w1, I would expect any retracement to also be shallow: 23.6% - 38.2% range, but we could mark 4-5 days completing this correction with today being day 1.
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Rich (Punshisher), SPX at approximately 696/697 at 10:30 a.m. (i.e. below 700 in first 60 minutes), does this give you enough information to support the w3 down has started option?
ReplyDeleteThanks for the blog and your comments in various blogs, great stuff.
JVE
JVE,
ReplyDeleteI've added to my shorts, but I haven't seen any acceleration to the downside yet (besides the overnight market). I would like to see a breakdown below 682. We could just be consolidating here for a bit, but the market always likes to keep you guessing.
Rich,
ReplyDeleteShould it breakdown below 682, what do your targets become?
Rich, I posted a few days asking for when you were exiting most of your shorts before 4 of 5 hits. I was able to find some decent indicators.
ReplyDeleteLike you said, a close on heavy volume is key. Also, in most of the bottoms, there is a full piercing of the lower Bollinger band (now around 675 I believe). Unless we close below 670 today/Friday, then the target gets moved to below 650 (as the lower band drops) for early next week.
jve,
ReplyDeletesorry it has taken me so long to respond, but i'm no longer trading full-time as I had to get a real job to allow me compound my profits ;-).
As for targets, I'm still looking at the 580-620 area as a great place for w3 to end. Let's see if the market agrees.