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Saturday, May 11, 2013

Saturday, 5/11/13 update

The above preferred count for the ES/SPX has the market in a Minor W3 off a Minor W2 low of last November.  The move has certainly been characteristic of a 3rd wave in it's relentless nature.  If the count is correct then we're seeing the last stages of Minute W5 of Minor W3 and thus an intermediate term top should be relatively nearby.  "If" and "should" in this statement are there for a reason - this move has looked to be near that IT top more then once in the last month or two, and yet has bounced right back up off a shallow and short lived correction to continue extending.  So be aware that the move could continue extending from here and that the anticipated IT top is actually not in close proximity.

Zooming in to the very short term, Micro Waves 1 through 3 of Minute W5 appear complete at the high of 1531.00 of last Wednesday (May 8).  The pattern since that high has been choppy and complex, not unusual for a 4th wave, and it also alternates well with the simple zig-zag of Micro W2 on Apr 25 - 26.  Micro W4 should wrap up fairly soon, if it hasn't already ended.  Micro W1 traveled 57.50 points and lasted roughly 5 days, so Micro W5 should travel a distance that is a fibonnacci multiple of 57.50 and be roughly 3 - 8 days duration.  The dotted lines in the above chart assume that Micro W4 will be a .382 retrace of Micro W3 and will thus carry down to 1608.50, and that the subsequent Micro W5 will be a .618 multiple of Micro W1 and thus run up to an eventual high of 1644.00 as a result.  There are a lot of assumptions there so the projection probably is most valuable as an approximation rather than an exact forecast.    

The top for Micro W5 will also be the top for Minute W5 and thus Minor W3, so that event should mark an intermediate term top and lead to the most serious selling that's been seen since the lows of last November.
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