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Monday, October 18, 2010

Monday 10/18/10 wrap up

From update posted this morning:
"Pattern on the hourly ES chart since last Wednesday looks very much like a triangle (wedge) which usually precedes a final thrust in the prior direction, so looks like this is a short term long opportunity developing."
Looks like that's exactly what happened today.  In Elliott, a triangle always precedes that the last thrust in a move, and if the below count is right, a sub-minute 5th wave ended at today's highs terminating a move up from the lows of 10/4/10.

From an Elliot wave standpoint the degree of difficulty in the ES over the last month has been extremely high.  Some extended periods of just plain chart mess, especially at the  end of September thru early October, combined with a lot of overlapping waves make the Elliott count very tentative.  Anyway, here's my best guess as to current count:

By this analysis the bull sequence that started at the end of August has three sets of waves 4-5 to go before it is completed.  From a time standpoint that should chew up several weeks to be proportionate.

Meanwhile the daily Trend/Osc ES chart continues to be in UP mode.

The EUR/USD is repeating the pattern we saw last week with prices trading below the uptrend line on the daily Trend/Osc combined with a confirmed downtrend on the hourly Trend/Osc.  This currency pair looks like it's forming a top.  A reading below 80 on the Dyn Osc at a daily close on the daily chart will generate a sell signal for the EUR from that time frame.

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