Sunday, 8/19/12 update

The IT bearish alternate for the ES has an invalidation point of 1419.75.  With this evening's high print of 1417.50 and with the EW count in an apparent 3rd wave it seems fairly certain to be ruled out sometime over the coming hours.

So that leaves the bullish alternate.  That count has the ES in an ending diagonal that's been unfolding  since the lows of last October:

Zoomed in:

OR

The idea here is that the entire bull market since the Mar '09 low has been an "X" wave which merely serves to separate two major bear markets, and that X wave has formed a double zig-zag which is in it's last stages.  If the above charts are in any way close to what may occur, then a major top can be expected sometime in late September or October.

There is another alternate that's been put forward by Pretzel which this site hadn't seen but which also is possible.  It's a variation on the same theme and projects the same results in the same basic time frame (note: don't know if Pretzel consider's the bull market since Mar '09 an X wave):

Friday, 8/17/12 update

ES target area for this rally is currently in the 1433 - 1437 area.

Saturday, 8/11/12 update

The theme song for this last week was written in 1965 by the Rolling Stones: "Can't get no.....satisfaction".   Talk about DULL!!  The ES traded in a 16.50 point range for the entire week, 1403.75 was the high and 1387.25 was the low, everything happened between those two points.

  
Not a whole lot of information could be gained this week to support either the IT bull or bear alternates.   But the bull alternate has to given a slight edge here, if for no other reason than the bear alternate is running out of real estate.  The drop dead point for the bear alternate is at ES 1419.75, perilously close to current levels.

For current detailed charts and analysis click HERE.

Saturday, 8/4/12 update

Any amusement park in the country would covet the roller coaster ride in the ES/SPX this summer.  The comment of last week still remains pertinent: until the ES/SPX breaks out of the trading range of recent months it's very difficult to determine the IT trend.  The choppy, overlapping structure of recent weeks looks corrective in nature (bearish), but even with that the ES/SPX has had an upward bias and is within spitting distance of the post crash highs (bullish).

The McClellan Oscillator might provide a clue to the IT possibilities.  There's a fractal apparent in the pattern which has bullish implications.

 
Following an IT low in early July of 2010 the market rallied strongly into a high in early August.  Along the way the McClellan spiked to a reading of 302.  A subsequent corrective sell off moved the McClellan back down to a reading of -205.  A sustained bull market followed that "reset".  The best way to characterize the sequence is that it was a Wave 1 burst off a significant low that spiked the A/D statistics, and although some selling resulted it was in the nature of relieving a short term overbought situation.
Now fast forward to June of this year.  Once again we see a sharp rally from what may turn out to be a significant low accompanied by a spike in the McClellan to a high of 307 in early July.  Following that there was a sell off which moved the McClellan back down to a reading of -159 thus "resetting" it.  So possibly we are looking at another spike - reset sequence as in 2010, with the implication that an IT bull market is in progress.

ES bear and bull alternate counts as of Friday close look like this:

Bear alternate

Note: a print above the March high at 1419.75 invalidates this count

Bull alternate

One final note.  Perhaps the best indicator of the eventual resolution of the recent trading range isn't to be found in EW analysis or examination of market technicals.  That indicator is simply that it is a presidential election year, and bear markets are bearish for re-election prospects.

Thursday, 8/2/12 update

ES somewhat oversold here, but not drastically so.

BEAR COUNT

(15 minute bars)

ST bear count has a sloppy Micro W1 into Tuesday's low followed by an irregular flat Micro W2 ending at this morning's high.  The drop since then has not yet developed a clear 5 wave structure, so if this count is accurate it has a distance yet to travel.  Invalidation level on this count is the Micro W1 low at 1370.25.

BULL COUNT

(1 hour bars)

ST bull count has a zig zag Minute W2 in progress since the Minute W1 highs early this week.  The 80% retrace level of Minute W1 at 1334.50 is a red flag for this count, and the count is invalidated on a drop below the 1321.25 low of Jul 24.  Although the bottom could well be in at the low so far today at 1349.50, if there is any further selling the .618 retrace of Minute W1 at 1346.50 could be a turning point.

Wednesday, 8/1/12 update

The pattern in the ES over the last couple of days has just been ugly - much more corrective in nature than impulsive - choppy and lots of overlaps.  So at this point the odds favor a near term rally rather than a sell off.