So much for Monday...

In my weekend post, I mentioned that today should clear up the ST count. Well, I guess I was wrong. After re-looking at the charts I realized that what I had previously labeled a-b-c or 1-2, 1-2 did not qualify as such based on my moving averages and other indicators. I have now put up a much better labeling of the move. Either a 1-2, 1-2 (see top chart) or a-b-c with c = a (bottom chart). Now, I for one lean toward the bearish count, but that likely doesn't come as a surprise to any of my readers. I realize that the big boys didn't want to give too much of their August gains back, and tomorrow starts a new month and more volume should be coming back into the market. However, it is also important to note that the last time we had a gap down and a near break of the trendline, the bulls recaptured the both. If they don't this time, then the charts are absolutely setup for a 3rd of 3rd wave and the beginning of primary wave 3!

My latest update...

I decided to post my weekend look over at Boston Wealth this time. You can read it here:

http://bostonwealth.net/?p=5108

Best to your trading!

Quick Morning Update

The move off of the morning highs so far looks impulsive. If the bears get a clean break out below 1028, then I lean towards a primary wave 2 top. Otherwise the bulls need to close near the highs to push towards 1050 next week.

New Highs Coming...

Sorry for the late post. Between my day job and back to school night for my highschoolers, I was too tired to put up a post once the kids were finally in bed. We're essentially following the Most Bullish scenario from yesterday's post. The move off of the low has been very impulsive. Watch the 15 min 34 SMA for key support until we get to new highs. Once we get there, the 60 min 34 SMA will likely only be broken to the downside once the move is over.

A rather disappointing day...

Wednesday's have been great range expansion days lately. Unfortunately, while today had lots of movement up and down, there was not a directional bias to be had. And since we were unable to take out Tuesday's high or Monday's low, we go into Thursday with little to work on.

The move off of the high has not been awe inspiring if you are a bear. While there were quick bursts of selling, it seem to dry up as quickly as it started. That leaves us with a few different patterns to consider:


Most Bullish
This gives us an A move down, B triangle, and C move down to end at our trendline. This pattern gives the bulls the greatest upside and most likely to attack 1050 next week.


Bearish with Another High
This pattern works out to one large 4th wave triangle that should finish with a high in the 1040 area before it reverses.


Immediately Bearish
This is where you get the most creative with the waves. It is a series of 1-2s with irregular flats in between. While sometimes these creative patterns end up working out, the odds always favor the simpler patterns. Under this scenario, we should blow right through the support trendline and move to 1000 tomorrow.

Where do I lean? I like the Bearish with Another High the best only because it seems to give us all the ingredients for a primary wave 2 top. Otherwise, I think we go to the Immediately Bearish scenario because I don't think there is enough bullish strength left to get to one more high, but we'll see. Best to your trading!

So far according to plan...

I love it when the market follows the targets the way it should. Not to say it does very often, but every once in awhile. Of course, how it gets there can sometimes throw you off. Now, all I need is for price to break the lower trendline, and we should have confirmation that this bear rally is finally over. But if it holds, then the market should have a shot at 1050 before rolling over. A gap down tomorrow should kick off selling, and I would expect the gap not to be filled. A break of Monday's lows will give us a bearish bias the rest of the week, so let's see it happen tomorrow morning.

A test of the highs...

Sorry I'm so late on getting this post up. Family responsibilities and little sleep kept me away. Here's the quick and dirty on what I want to point out:

- my minor wave 4/5s that I had listed before appear to have been put in during the overnight market Sunday-Monday, and so we went straight to the larger wave 3 completion yesterday at the highs right at my target.

- Yesterday's move down did sport an impulsive look to it. To keep the price action bullish, the wave 4 should not have moved lower than 1018. During last night's price action, ES moved right to that zone before reversing.

- Today's wave 5 can be any of the following:
- A wave 5 failure at the .786 retracement
- A double top
- A slightly higher high (shouldn't go over 1040).

If price breaks above 1040, then there is a different pattern in place, I will look for resistance in the 1050-1060 area.