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Tuesday, April 12, 2011

Tuesday 4/12/11 update

ES - daily - alternate count

Following up on the alternate ES count from last night's post, the internal count on the rally from mid-March through last week counts better as a three wave move than a five. Thus the thought of that being a "B" wave in an ongoing correction from the seven month rally that ended in mid-Feb fits well.  It also makes sense from a duration standpoint - seven months of steady bull market would seem to need more than one month of correction.  A further thought is that the correction is currently labeled as a Major Wave 2, 2nd waves typically cut much deeper than the 30% that was achieved at the Mar 17 low.

ES - hourly - alternate

Finally, as I mentioned last week, the underlying technicals of the rally from the mid-March lows have been much weaker than would be expected for a 1st wave up off a major low.  Following is a chart of the daily NYSE against an 8 day MA of total daily volume.

And another one, daily NYSE against 21 day daily tick.

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