Saturday, 10/5/13 update

Last weekends short term EW count and forecast was obviously wrong.  Drastically so, I'll be the first to admit.  But the observation upon which that count was based has not changed, i.e. outside of the first few days off the Sep 19 top the action has been much more corrective looking than impulsive.  As of Friday close a case can be made for a double zig-zag count into the ES 1663.25 low of Thursday, which could well be the end of a corrective sequence from the Sep 19 ATH.   The action since then has an impulsive look to it, which is consistent with what would be expected if a new rally sequence has commenced.  Chart looks like this:

So is Lucy (powers that be) gonna sucker Charlie Brown (bears) once again into a failed kickoff?  Could well be - can't help but think that if Congress manages to resolve the budget circus then the market is liable to launch on a tide of exuberance.  Temporarily at least - debt limit circus standing close by in the wings.  Hope Charlie is wearing pads in the rear of his pants.

However, there is hope for the bears - a bearish ST alternate here has a 5 wave sequence bottoming at the Sep 30 lows with a flat in progress since then.  Additionally, that flat is currently in it's "c" leg, which should be a 5 wave impulse up, also consistent with what would be expected:

A possible target for that "c" leg is at the .50 retrace of the down impulse off the ATH.  That level is at ES 1696.75.