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Monday, April 18, 2011

Monday 4/18/11 wrap up

It looked very much like the ES had turned up late last week, but SURPRISE!!  Anyway, the bearish alternate discussed recently now appears to be the case (see "2nd alternate" on weekend post and Tues, 4/12 & Thur, 4/14 updates).  Not only is that bearish alternate not out the window, it's sitting in the middle of the living room couch hogging all the popcorn.

That count assumes that the Major Wave 2 (blue) correction that started in mid Feb is still in progress.  Major Wave 1 lasted seven months and traveled 340 points, if Major W2 were done at the mid March low it would be only about a month in duration and around 100 points in length.  So it's not unreasonable for it to have more time and distance yet to travel.  Also, as was pointed out last week, the underlying technicals of the mid March to early April rally were on the weak side, more typical of a B wave than a 1st wave kickoff to a significant bull run.
If Major W2 is in fact still in progress, then the ES put in the A wave from the mid-Feb top into the mid-March low, the B wave ran from mid-March into early April, and the C wave is currently in progress.

ES daily chart - bear alternate

ES hourly chart - bear alternate 

The AUD/US$ has quite possibly seen the top of a bull run that started in late May of last year.
 Five waves up are apparent from a low established in mid-March to the high print of last Friday.

 AUD/US$ - 2 hour bars

In turn, that five wave structure appears to be Minor W5 of the bull sequence dating back to last May.   If correct, that concludes an Intermediate Wave 1 and thus Intermediate Wave 2 has commenced with today's sell off.

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