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Thursday, May 24, 2012

Thursday, 5/24/12 update

Preferred count in the ES has it in a bear market with an eventual target as low as ES 925.

Since the late March top @ 1419.75 the ES appears to have put in a Minute Wave 1 & 2 down (green) and a Micro waves 1 through 3 (black) of Minute W3, with Micro W4 in progress.  Micro W4 is a zig zag which alternates with the flat of Micro W2, an EW requirement.
Target for Micro W4 is between 1333.25 where (c) = (a) of Micro W4 and 1335.00 where Micro W4 = .382 of Micro W3.

If the ES should rally up past 1352.50 this count is invalidated.  That level is the low of Micro W1 and pushing up past that point would create an overlap, which is an EW no-no.

The bullish alternate at this point has the ES completing a double zig zag Minor W4 at Sunday night's low of 1287.25.  It would now be in Minor W5.  This is an unlikely looking count due to the long duration of Minor W4 as compared to the Minor W2 of last December.  This count is invalidated by a drop below 1266.25, the peak of Minor W1. A drop below that level would create an overlap.

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