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Saturday, October 22, 2016

Saturday, 10/22/16 update

The sideways chop in the ES/SPX that started last summer continues to manifest it's annoying self.  Hard to come up with a high confidence EW count, here's a best guess:

Saturday, October 15, 2016

Saturday, 10/15/16 update

The triangle "X" wave posited in last weekend's update played out pretty much as anticipated.  That wave terminated on Monday and a 5 wave impulse down ensued leading to a low on Thursday morning.  The bounce since that low put in three legs into a high Friday morning, adequate for a correction, so it may be that another leg down has commenced.  If all this is correct, then since the Monday triangle terminus we've seen either waves A & B of zig-zag "Y" or we've seen waves 1 & 2 of wave A of that zig-zag:

Backing out to a longer view the two most likely possibilities are that Primary W III of the bull market since the '09 lows topped this summer with Primary W IV in progress (1st chart below) or the ES/SPX is working out Major W5 of Primary W III (2nd chart below).  Couple of things to note: on the 1st alternate Primary W II was a simple zig-zag, so Primary W IV needs to be a flat, triangle or some type of complex corrective sequence as per the EW rule of alternation. On the 2nd alternate the count is invalidated if the market continues selling off and drops below the assumed start of Minor W1 at ES 1981.50.

Saturday, October 8, 2016

Saturday, 10/8/16 update

In early September the ES/SPX sold off hard and bottomed on Sep 12.  The ensuing rally was impulsive and strong and looked to be the start of a bullish run.   But except for another short bullish burst a week and a half later the pattern has been anything but impulsive - in either direction.  Just a slow sideways grind that is enough to make one scream.  So it's hard to see this situation resolving itself to the upside.   The problem from an EW standpoint is that the pattern is ambiguous enough to suggest a number of possible counts.  One of those is below, IMO it is the most likely solution but not by much:

Monday, September 26, 2016

Monday, 9/26/16 update

Didn't publish the bear alternate on Saturday, but today's follow through selling has put an impulse down off last weeks high.  The move has been more sustained than would be expected in the bull alternate from the w/e post, although that alternate cannot yet be ruled out.  But if we continue down below the ES 2100.25 low of Sep 11 then the bear alternate is probably in play.  EW counts for that alternate:

Saturday, September 24, 2016

Saturday, 9/24/16 update

Current preferred count for the ES:

Sunday, September 11, 2016

Sunday, 9/11/16 update

Awfully heavy hit on equities on Friday - down 53+ on the SPX, NYSE declines over advances by 17 to 1 and down volume over up volume by 27 to 1!  Very strong.

Last update proposed a 4th wave expanding diagonal in progress with a quick 5th wave yet to come.  Obviously that's not happening.  Looking at the pattern of recent weeks there are all sorts of possible counts.  One of those possibilities is that the 5th wave anticipated in the alternate referenced in the last post has in fact occurred.  Reworked count using that idea is as follows:

Hourly bars

Daily bars

If this count is the one that is in play then the ES is in Primary W IV which should be a significant decline - several months and several hundred points.  A prior 4th wave of lower degree is the usual target for a 4th wave, in this case Major W4 bottomed around ES 1800, so that would be where Primary W IV may be headed.

The main alternate here would be that the top that was established in August was Minor W1 of Inter W3 of Major W5 as below:

In this case the ES is in a 2nd wave which should bottom relatively soon with far less damage than the 1st alternate proposed earlier.  A continuation of the bull market in the form of Minor W3 should ensue.  This count is invalidated with a drop below the starting point of the proposed Minor W1 at ES 1981.50.

Monday, September 5, 2016

Monday, 9/5/16 update

The "c" wave ED proposed last Thursday got blown up with Friday's rally.  The sideways track of recent weeks is beginning to look like an expanding triangle.  Triangle corrections are only found in 4th waves of 5 wave impulse sequences, and that brings an alternate count into view, which is that the ES completed Intermediate W3 of Major W5 at the mid-August high:

Since Inter W1 is longer than Inter W3 in this count, the Inter W5 that will commence at the conclusion of the Inter W4 triangle has to be shorter than Inter W3 to comply with EW rules.  So a relatively short burst for Inter W5 is likely.  Currently two possible targets for the Inter W5 top are at ES 2228 and 2261, but these targets are very tentative.  If this count is correct, that Inter W5 top will also be the top for Major W5 and in turn Primary W III, so there should be a significant bear market following that event.

Short term count for this alternate looks like this:

The count that has been preferred at this site is still possible and thus in play.  That count has the mid-August top labeled as Minor W1 of Inter W3 with Minor W2 in progress.  If that count is in fact the correct one then the significant top anticipated by the alternate outlined above gets pushed a lot farther down the road.