Sunday, 7/27/14 update

Minor W5 of Intermediate W3 can be counted as done as of last Thursday's high.  If so it formed an ending diagonal which would portend a fairly steep drop for Inter W4.

Inter W2 was a flat so a zig-zag for Inter W4 would provide alternation.  Possible targets for Inter W4 are at 1942.75 which is a .236 retrace of Inter W3 and an area of prior 4th wave lows of lower degree, and secondly at 1937.00 where there is a volume hole as seen below.

Longer term perspective:

Saturday, 7/19/14 update

Current short term EW count on ES:

This count has the Intermediate W3 top yet to occur.  An alternative possibility is that the Inter W3 top is already in place at the highs of Jul 3 and Inter W4 has been working it's way out since then.  Either way it's likely that there is more corrective activity yet to unwind before the Inter W5 rally kicks off.

Wednesday, 7/9/14 update

LEAVING FOR VACATION, BACK NEXT WEEK

Have we seen a significant top?  Too early to say for sure, and calling a top has often been a good way to look foolish in the last year.

Sunday, 7/6/14 update

The bull market continues to extend.  Still tracking two alternate counts, they are only slightly different and both have the ES/SPX in the 5th wave of the bull market off the 2011 lows.  One thing to note: Alternate #2 originally was considered an ending diagonal in progress, that possibility has been eliminated and instead it's a regular 5 wave sequence being formed.

PLEASE NOTE: My charting/trading platform (TD Ameritrade - TOS) has "lost" the daily ES data for the 1st two weeks of March, so the labeling in the charts approximates an interim top that occurred in that time frame 

Alternate #1

Alternate #2

Sunday, 6/29/14 update

Best guess right now:

Saturday, 6/20/14 update

Updated counts on the two alternates presented last weekend:

Alternate #1

Alternate #2

Couple of things to note:

In Alternate #1 an ending diagonal is envisioned off the early February lows.  In an ED the 3rd wave needs to be shorter than the 1st (and the 5th shorter than the 3rd - thus the diagonal designation).  At ES 1963.75 Intermediate W3 would be longer than Inter W1, so a continuation of the current rally through 1963.75 without a sell off overlapping the Inter W1 high at 1892.50 would invalidate the ED idea.

Secondly, the underlying market technicals of last weeks rally were notably weaker than those of the weeks immediately preceding, thus supporting the idea that last weeks upward pop was either a 5th wave as in Alt #1 or a B wave as in Alt #2.

Saturday, 6/14/14 update

The end game for the bull market dating back to the Oct 2011 low continues to play out.  The preferred view on this site is that the ES/SPX is in the 5th Major wave of the 5 waves constituting Primary Wave III off those 2011 lows.  There are more bullish possibilities but they would necessitate more extension in the current wave count.  Somehow that doesn't seem all that probable, but this bull has continued to stampede without a whole lot of let up for the last 32+ months so it's definitely possible.

But assuming that Major W5 is in fact in progress, there are two alternates that carry a slightly different internal count but have managed to converge at this point.  They both have the ES/SPX in Intermediate W4 of Major W5.  The difference between the two is the amount of distance yet possible in terms of time and price before a Primary Wave III top is reached.  Alternate #1 would limit that potential more than Alternate #2.  This is because Alternate #1 envisions an ending diagonal which portends an ever narrower trading range out to the point of eventual termination.  On the other hand, Alternate #2 has a standard 5 wave structure in progress for Major W5, with Inter W3 of that structure potentially finished and longer than Inter W1, which would allow Inter W5 of the move to travel as far as it wants and not violate EW rules.  It should also be noted that in Alt #2 the rally currently labeled Inter W3 could well be just Minor W1 of Inter W3, which would push the top of Major W5 even higher and more forward in time. 

Alternate #1

Alternate #1 proposes an ending diagonal for Major W5 starting from the 1732.00 low of Feb 5.  Intermediate W1, W2 &; W3 are done with Inter W4 in progress from the high of 1854.75 on Jun 9.  There's some nice symmetry within Inter W3 which has the "c" leg almost exactly equal to the "a" leg.   A possible target for Inter W4 is at 1879.00 which marks the .50 retrace of Inter W3 and is right in an area that has provided support/resistance over recent months.

Alternate #2

Alternate #2 has Major W4 bottoming at the 1803.25 low of Apr 13 with Intermediate W1, W2 & W3 of Major W5 complete and Inter W4 in progress.  Of note is the fact that Inter W3 would have equaled Inter W1 at 1954.25, so its high print of 1954.75 is two ticks beyond that and thus makes it longer than Inter W1.  This allows the coming Inter W5 to be of any length and still have Major W5 adhere to EW rules.  In this count Inter W2 was a simple zig-zag so Inter W4 needs to alternate in form with a flat, triangle or some type of complex formation.  A possible target low for Inter W4 is at 1918.00 which is the .382 retrace of Inter W3 and is right in the area of prior 4th wave lows of lower degree.

For longer term counts and analysis click here.