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Thursday, March 29, 2012

Thursday, 3/29/12 update

Lots of possibilities here.

First is that we are in Minor W5 from the low at 1338.50 of Mar 6. This Minor W5 is the last leg of Intermediate W3 that started on Nov 25. Within Minor W5 we've seen a Minute W1 & W2 and now within Minute W3 we've seen Micro W1 & W2, with Micro W2 bottoming at today's low of 1386.25. As such we should see a strong move up from here in Micro W3 of Minute W3. Minor W5 (and thus Intermediate W3) has a preliminary target in the low 1500's.
There is also the possibility that Minor W5 is forming an ending diagonal and the move up from Mar 6 through Tuesday's high was the first a-b-c leg and the selling into today's low was the 2nd leg of that formation. Sorry, don't have a chart for that.

Second, it's possible that Minor W3 topped at the high of Mar 19 rather than in late Feb, and that Minor W4 has been in progress since that time and is forming an irregular flat. In that flat wave "a" bottomed on Mar 23 at 1380.50, wave "b" topped on Tues at 1419.75 and wave "c" is still in progress. In this case wave "c" and thus Minor W4 should bottom at or below the low of wave "a" at 1380.50. Minor W5 will follow and will also have a target in the low 1500's. One problem in this alternate is that the internal count for Minor W3 is awkward.

Finally, there is the possibility that Tuesday's high marked the top of Major Wave B of a flat structure dating back to last May. This would make it a very significant top. If this is the case, then the ES is in the very early stages of a bear market that will eventually lead lower than the low of ES 1068 of last October.

2 comments:

  1. Hi Al,

    Thanks as always for the posts.

    Where can I trade ES?

    Is a position for you 4% of your portfolio?

    Aaron

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  2.  ES is e-mini S&P 500 futures - should be able to trade that through any decent broker.  I use the Think or Swim platform which is now part of TD Ameritrade.
    Yes, my rule of thumb is 4% or less of portfolio based on placement of stop loss.

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