Saturday, 1/28/12 update

The bull move that started at the lows of Dec 19 appears to have concluded at Thursday's highs. We should see a continuation of the corrective selling that's occurred since then into the middle to end of next week, but the most likely Elliott counts at this juncture indicate more bull market ahead.
Two most plausible Elliott counts at this time:

Alternate #1 (ES daily)

Alternate #1 (ES hourly)

Alternate #2 (ES daily)

Alternate #2 (ES hourly)

A quick look at the LIBOR rate and the TED spread lends credence to the near term bullish scenario. On a macro-economic level LIBOR rates and the TED spread are an indication of liquidity, higher numbers mean less liquidity and lower numbers mean more. Both have formed a top in late December after a run up that started at the end of last July.

TED spread

LIBOR

Thursday, 1/26/12 update

Have we seen a near term top? Could well be, the ES hit right in the middle of the target area and promptly sold off. We're bouncing at the moment, if the ES can't mount a rally past this morning's high then things could get nasty.

Wednesday, 1/25/12 update

The ending diagonal proposed in yesterday's post is unfolding close to what was anticipated. Target for the ES remains in the 1326.25 to 1331.25 area.

Tuesday, 1/24/12 update

With the price action last night and today the ES appears to be forming an ending diagonal for Minute W5. Target for Minute W5 and thus Minor W3 is 1326.25 to 1331.25, and a top should be achieved some time in the next two days.

Monday, 1/23/12 update

Equities continue to grind out the bull.........sausage. Bull markets have a way of grinding ever upwards and destroying all the bears in the process. And then, when the bears are exhausted - boom. This one is no exception.
Market hit a little air pocket today, but if my count is correct it's only the "a" wave of a 4th wave correction, with a 5th wave close by and yet another wave 4 - 5 sequence after that before a more significant top. Best guess as to current count (ES hourly bars):

ES 1368.75 was the high of last May and the ES is getting within spitting distance of that mark. There are two most possible alternates medium term IMHO. The first looks for a very significant top in the area of those May highs followed by a deep sell off, the second envisions an energizer bunny market. Doesn't seem to be a lot standing in the way of this market at this moment in time, so the bunny might be the correct read. But surprises are the way of the world, so hang loose.

Alternate #1

Alternate #2

Wednesday, 1/18/12 update

Solid up today in equities, doesn't look good for the most bearish alternate that's being tracked. The ES is right at a downtrend line connecting the highs since the top of last May, if prices don't turn lower almost immediately that bearish alternate can probably be ruled out.

ES hourly

ES daily

Monday, 1/16/12 update

The alternate Elliott counts being followed all show that the ES is in the 5th wave of the move up from the lows of Dec 19. There is always the possibility that the rally will lengthen in a 3rd wave extension. However, buying pressure as measured by the Vindicator Buy/Sell has been diverging since Jan 6 and showed a drop off at the end of last week, so the chances of a 3rd wave extension occurring appear slim at this point. So looks like some type of top in the ES is in the near term future.

Vindicator Buy/Sell
(buying pressure - green line, selling pressure - red line)