Monday, 2/13/12 update

The ES/SPX appears to be in a 5th wave of the rally off the lows of late Jan, and that move is itself a 5th wave of either Intermediate or Minor degree ( more on that in a bit). Buying pressure as measured by the Vindicator Buy/Sell has been visibly waning with a series of lower peaks since late January (buying pressure is represented by the green line in the chart) which supports the idea that a 5th wave has been in progress:


In fact, 5 waves can be counted in the move up off of Friday's lows, so it's entirely possible that a top of some significance was established at today's highs, but if so that will need confirmation which isn't yet evident.

Whether the ES/SPX is going to put in a Intermediate or Minor degree top is also an open question. The two pertinent alternate counts are as follows:

Intermediate degree

Minor degree

The Minor degree alternate seems more likely, the move up since the Dec 19 lows looks like a unit to me. Also, in the Intermediate degree alternate Minor Wave 4 did much less damage (34 vs 73 points) and was much quicker (3 days vs 8 days) than Minor W2. The difference is significant - if the ES/SPX is on the verge of a correction of Minor degree it will be much more shallow and short lived than an Intermediate degree sell off.