Saturday, 4/23/16 update

The top of the run up from the early February low in the ES may be in as per below:

If not the chances are that it's not very far away:

It has to be mentioned that there is the possibility that this 5th wave could extend in which case both the above counts become poo-poo.

Monday, 4/11/16 update

Here's a couple more possible alternate EW counts for the ES that I didn't publish in yesterday's update.  With today's action they have gained greater probability:

The 1st one has a pair of nested waves 1 & 2 in what will eventually be an "a" wave of a correction, the 2nd has a zig-zag correction already in place with a 2nd zig-zag developing.

Sunday, 4/10/16 update

Traded from the short side last week and did pretty well, but covered short ES positions established on Friday morning at the close that day.  Although my favorite timing oscillator is pointing down for the ES, there are mixed signals elsewhere which raise questions about the continuation of the sell-off.  Not least of these is the EW pattern in the ES from overnight Thur-Fri and through Friday's trading. The rally overnight into Friday morning is clearly impulsive, and the sell off from Friday morning into mid-afternoon only generated 3 waves.  If that sell-off was done at that point then the odds are that we'll see a run up to last Monday's highs at the very least.  ES short term chart looks like this:

With that in mind, here are some possible short term counts:

OR   

 

Saturday, 4/2/16 update

At yesterdays high of ES 2067.00 the market has traveled 264.50 points in the ES since the early Feb low @ 1802.50.  That's  over 14% in a little over 7 weeks.  So it's fair to anticipate at least a correction (or more) in the near future.

There are a number of possible counts since the Feb 11 low.  My preferred count has the 5th wave of the impulse off the Feb 11 low in progress with a pair of nested waves 1 & 2 of that 5th wave in place.  This would indicate a 3rd of a 3rd wave happening currently.  Friday's strong move up off the day's low certainly fits the bill for that type of move: 

Another possibility at this juncture also has the 5th wave of the rally from early Feb in progress.  However, the count here has the top of the 3rd wave occurring about 10 days earlier than above with a very quick and shallow 4th wave, followed by an ending diagonal 5th wave which is very close to topping:

It's important to point out that from an EW standpoint the rally could extend and thus continue running for quite a bit longer than these counts suggest.  That doesn't seem reasonable, but then again the market is not necessarily a reasonable critter.

Sunday, 3/20/16 update

Current short term count on the ES:

Saturday, 3/12/16 update

Should see a top to the move up off the Feb 11 low in the next week or so:

Since Inter W3 is shorter than Inter W1 in this count, the maximum travel for the current Inter W5 is the length of Inter W3.  That point is at ES 2088.00, and represents the invalidation level for this count.  The alternative in that case is the probability that the move is extending, hard to believe since the move up off the Feb 11 low exceeds 200 points (11% +) in the space of a month - but it's still possible.

Saturday, 3/5/16 update

The preferred EW count for the ES/SPX since last fall is that the indices have been in Primary W IV of the bull market that started in Mar '09, and that Primary W IV was tracing out a triple zig-zag ( http://willowtreetrading.blogspot.com/2015/09/saturday-9515-update_5.html).  As of this week, this count is looking pretty darn good.  It appears that the 3rd and final zig-zag for Primary IV was complete at the Feb 11 low at ES 1802.50.   In that context here's the long term chart:

Zooming in on Primary W IV it can be seen that the rally since the Feb 11 low has now overlapped two key levels established by the final zig-zag that started early last November:

 The 1st key overlap is the Minor W1 low of the "c" leg of that zig-zag at 1983.25, the 2nd key overlap is the Wave "a" low at 1998.50.  Those overlaps are important because they eliminate the possibility of an extension to the move that started last November.  One thing to note: the SPX has not yet overlapped the equivalent 2nd overlap area.  That point is at SPX 2019.39.  The SPX fell just  short of that Friday with a high print of 2009.13.  So it's not far away.

This site publishes an indicator developed by the author that is a combination of market statistics such as rate of change, Adv/Dec, Up/Down volume and Total volume.   It's called the Equity Oscillator (EO) and has been used by the author since the mid 1980's.  The EO tends to generate very distinct divergences at significant market lows, which it did at the September and February lows:

Usually when the EO establishes a divergence such as these at a market low it marks a change in Intermediate Term trend.  The September divergence was an exception.  But if the preferred count is correct then the divergence at the Feb 11 low is a confirmation of that count.  The EO is published most days on this site here.

The short term count for the ES is labeled with a Minor W1 move from the Feb 11 low into a top on Feb 22, with a Minor W2 bottom following on Feb 24.  It's difficult to say what the EW count is for the pattern since the Minor W2 low other than it's not yet complete:

One final note.  The crude oil market has been a major driver of equity prices in recent months.  It's interesting to note that crude oil prices also bottomed on Feb 11 and have been in a sustained uptrend since that time.  The author does not trade one market based on what's happening in another, especially when it comes to equites.  There are seemingly numberless factors driving equity prices over time, and factors fade in and out in terms of importance.  But it doesn't hurt to keep an eye on things that are currently capturing the attention of the general marketplace.